Answer Six


The concept of trusts has been developed over the centuries and is now a vital part of the modern Australian legal system.

In simple terms, a trust is a relationship formed between three people: a settlor, a trustee and beneficiaries. The settlor provides trust ‘property’ to the trustee who manages it on behalf of the beneficiaries.

There are three types of trusts – discretionary, fixed (unit) or hybrid – and each can have substantial tax and asset protection benefits when used properly as part of a financial strategy.

Trusts can work for businesses and individuals and our role is to design the best trust strategy to maximise the benefits of this concept for your individual circumstances.

Insurance Bonds

Insurance Bonds are long term investments offered by insurance companies and friendly societies. They are written under insurance law so sit outside of other investment streams and you don’t even need a tax file number to set one up.

Insurance Bonds can be useful strategies for estate planning, child savings plans, tax minimisation and Centrelink / Aged Care planning in some instances. However there are two key rules to keep in mind:

  • Tax – tax on earnings within the insurance bond are taxed at the life company tax rate of 30%. However, as long as you hold the investment for at least 10 years, you will receive the benefit free of any further tax.
  • 125% rule – you can only contribute up to 125% of the previous year’s contribution, so if one year you contribute $0, you will reset the 10 years time frame if you make a future contribution.

Review Your Nominations

It is critical that you review your beneficiary nominations within your superannuation during your estate planning and then continue to review this information regularly.

Some things to consider include:

  • Who should receive your estate?
  • What is the tax implication of your choices?
  • Do you have other assets to consider?
  • Do your nominations line up with your Will?
  • When does your nomination expire?

We can help you ensure all the pieces of your estate planning fit together.

Book an appointment

Submit your details and we’ll be in touch to book your appointment to discuss your financial future.