Q&As

Lee-Ann Cartoon on Testamentary Trusts: The Importance of Planning

Thursday May 3, 2018

Lee-Ann is an experienced tax and estate planning lawyer. She has worked throughout Australia and the UK advising clients ranging from global financial institutions and multinational energy and resource companies to high net wealth individuals. Lee-Ann's experience has given her an appreciation of the importance of approaching any matter commercially, logically and with the client's end goal front of mind. 

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Lee-Ann has developed a particular interest in the area of estate planning and specifically the use of appropriate trust structures. She enjoys tracking developments in this area and through this seminar hopes to impart knowledge that may be useful for other practitioners.

We had the pleasure of sitting down with Lee-Ann recently to discuss key challenges and opportunities facing the industry today.

Read the Q&A below and hear more from Lee-Ann at the Deceased Estates and Administration seminar.

Can you tell us a bit about your practice? What does your day to day look like and what are the types of matters that interest you the most?

Every day is slightly different. The main areas I work across include estate planning, trust deed reviews and advice and associated taxation advice. I generally meet with several clients each day, which I greatly enjoy as listening to and helping people is one of the most rewarding aspects of my job. I listen to what they wish to achieve and offer suggestions as to how best we are able to do this. I then spend a significant part of my day either drafting or reviewing documents and always take some time to speak with my colleagues around current matters and keep up to date with key legal and tax developments. 

What are some of the key trends and developments in Wills and Estate practice that you’re seeing in WA/nationally? 

We are definitely seeing an increased uptake in estate planning services among clients in their 30s and early 40s. People have become increasingly aware of how important a robust estate plan is as part of their family's overall financial health and well being. We are also seeing an increased number of business owners appreciating the importance of planning for the succession of their business and personal entities, including family companies and trusts. Finally, there has been notable growth in the area of estate litigation and as such a well drafted Will and accompanying Letter of Wishes or Proof of Evidence is becoming more critical than ever for clients in order to avoid protracted and costly family disputes in the future.

Your topic will cover ‘Testamentary Trusts: The Importance of Planning’ at our up and coming seminar – why does this continue to be such a significant/difficult area?  

"Good drafting aside, in general Testamentary Trusts are only as useful as the people who control them allow them to be."

Testamentary Trusts have become a vital part of a comprehensive succession plan for many clients. Given the very real generational wealth shift that is currently taking place, clients who wish to protect such wealth for future generations, enable their children to avail themselves of beneficial tax relief or offer financial protection to children in the event of Family Law disputes, are very keen to use such structures in their Wills. 

Testamentary Trusts can also be used for more specific purposes, such as catering for the education of grandchildren, holdings assets for vulnerable beneficiaries and holding Superannuation proceeds for Death Benefit Dependants. It is important that clients preparing estate plans, as well as clients who need to administer estates, understand how Testamentary Trusts operate and their "lifecycle". 

Good drafting aside, in general Testamentary Trusts are only as useful as the people who control them allow them to be. I hope to be able to educate people further around their various uses and operation.

What’s one mistake you see practitioners make when dealing with a testamentary trust?

I would say that despite their plentiful benefits, Testamentary Trusts are not for everyone and it is important that clients understand how they operate and whether in fact they are a suitable vehicle in their particular situation.

What is one tip you would give to practitioners who are trying to determine whether a testamentary trust is required?

I would suggest understanding the terms of the Testamentary Trust(s) that the practitioner proposes to use, making sure the client understands how the Trust(s) will operate and listening to the client's wishes in this regard.

You can hear more from Lee-Ann at the Deceased Estates and Administration seminar, being held on Tuesday 19 June at the Parmelia Hilton Perth, Perth.

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