Your Financial Services Guide to Estate Planning, Administration & being a Beneficiary

Transcription

1 Your Financial Services Guide to Estate Planning, Administration & being a Beneficiary 1 October 2016

2 Contents About this Financial Services Guide 2 Life events 4 About the Estate 5 Estate Planning 6 The benefits of Estate Planning 6 The Estate Planning process 6 Wills 7 Why you should have a Will 7 Advantages of a Will 8 If you die without a Will 8 Preparing a Will 9 Revising a Will 9 Locating the Will 10 Contesting a Will 10 Executorship 11 Selecting an Executor 11 Duties of an Executor 11 Executor s Map 12 Tasmanian Perpetual Trustees Estate Administration process 13 Administering the Estate 14 Distributing the Estate 14 Enduring Power of Attorney 15 The benefits of an Enduring Power of Attorney 15 Who should be an Attorney? 16 Types of Power of Attorney 16 When should Power of Attorney be considered? 17 Power of Attorney and Tasmanian Perpetual Trustees 17 Administration under Guardianship and Administration Orders 18 Being a Beneficiary 19 What is Estate Administration 20 The pre-probate stage 21 The post-probate stage 22 The distribution stage 23 Planning for your inheritance 24 Sale of real estate 25 Tasmanian Perpetual Trustees will act in your best interests 26 Rights, powers and duties of the Executor 27 What if a Trust is created? 28 You and Tasmanian Perpetual Trustees 32 Appointing Tasmanian Perpetual Trustees as an Executor 33 Fees and Commissions 34 Company Policies and Procedures 37 Complaints and Feedback 37 Glossary 39 Important Estate Planning information 40 Guide to Estate Planning, Administration & being a Beneficiary

3 About this Financial Services Guide Tasmanian Perpetual Trustees is a wholly owned subsidiary of MyState Limited, and a major Tasmanian based trustee and wealth management Company. Established in 1887, Tasmanian Perpetual Trustees is a Trustee Company authorised under State legislation and holds an Australian Financial Services Licence to provide traditional trustee company services as defined in the Corporations Act. Tasmanian Perpetual Trustees is distinguished by its commitment to personal service. Traditional trustee services include providing Estate Planning advice; the preparation of Wills, Powers of Attorney and other Trust documents; administering Estates and Trusts as Executor, Administrator or Trustee (whether we act jointly with other people or alone); acting as Enduring Attorney under Enduring Powers of Attorney; or as Financial Administrator under Orders of the Tasmanian Guardianship and Administration Board. Tasmanian Perpetual Trustees is also the product issuer of a number of managed investment schemes and receives remuneration from those products. Tasmanian Perpetual Trustees when providing traditional trustee services may also obtain financial services or financial advice from MyState Wealth Management (a registered business name of Tasmanian Perpetual Trustees Limited) and MyState Bank Limited (another wholly owned subsidiary of MyState Limited). MyState Wealth Management and MyState Bank Limited are entitled to be remunerated accordingly. Fees and charges quoted in this Guide are the maximum rates that apply at the time of publication and are subject to variation at our discretion. Lower fees may be individually negotiated at our discretion or may also apply to some pre-existing estates administrations, trusts administrations and other financial administrations and can be confirmed individually to affected parties. This Financial Services Guide explains particular traditional trustee services that we offer. It also contains important information relating to: Remuneration and other financial benefits we receive when we provide traditional trustee services; Our compensation arrangements; Our Code of Conduct; Our Privacy Policy; Our Conflict of Interests Procedure; Our internal and external complaints resolution options available to you. 2

4 In a perfect world there would be no need to plan. There would be no need to be concerned about safeguarding the future of yourself, your family or the other people and things that are important to you. However, common sense tells us that good planning is a vital aspect of almost everything we do in life. Sound planning can make a crucial difference in the quality of our lives, the security we enjoy as we grow older and the comfort that comes from knowing arrangements are in place for most of the events that can be expected through the years. This Guide aims to provide you with an overview of the processes involved in Estate Planning and Estate Administration and provides information on the services offered by Tasmanian Perpetual Trustees. This is a guide only to confirm information or to enquire about any aspect of Estate Planning and Estate Administration, Wills or Powers of Attorney, contact your nearest branch of Tasmanian Perpetual Trustees. A glossary of Estate Planning and Estate Administration terms can be found at the end of this Guide. It provides definitions of the words and phrases often used in Estate Planning and Estate Administration. Estate planning is a very important process for you to set the direction in the way your assets are managed if you lose your ability to make financial decisions or when you have passed on. It is never too early to begin Estate Planning. With Estate Planning your future starts now. This document is not legal advice and Tasmanian Perpetual Trustees accepts no liability for people acting on information contained in this Guide. Any references to legislation are generally to Tasmanian legislation. 3 Guide to Estate Planning, Administration & being a Beneficiary

5 Life events There are some very important events which occur during a lifetime, which may require you to review your personal and financial objectives. By realising the importance of reviewing your Estate Planning, you can have peace of mind that your family has been provided for in the manner that best meets your wishes and their needs. The following are examples of some of the typical life events that occur and that may warrant a review of your Estate Planning: Births When a new child or grandchild is born. D isability A family member with special needs such as disability, illness or other infirmity usually requires special provisions to meet that family member s needs. D eaths The death of a family member, beneficiary, Executor or guardian. M arriage A marriage usually revokes your Will and requires it to be revised. Divorce A divorce usually revokes your Will. You may need to review your Estate Plan in the event of a divorce in order to know the effect the divorce has upon your child s or another beneficiary s inheritance. For example: - You named your divorced spouse as a beneficiary of your superannuation. - You named a married son or daughter of yours as joint owner with their spouse, but they are now divorced. - Your Estate may actually be in the control of your ex-spouse if your children are minors. Registering a Deed under the Relationships Act 2003 R evoking a Deed registered under the Relationships Act 2003 P urchase of property Changes to investments or beneficiaries may require you to review your Estate Plan. T hese life events are only a few examples of many life circumstance changes which will require changes to any arrangements you have previously made for the distribution of your Estate upon your death. 4

6 About the Estate At the time of death, almost everything you own becomes known as your Estate. This includes all possessions; the assets acquired throughout your life. For example a home, car, bank accounts, insurance policies and other assets. In general, it does not include assets held as joint tenant with another person or assets of a partnership, company or a Trust. You can usually plan to include assets in Superannuation however. An Estate can be divided into the following categories: cash in hand or in the bank; term deposits and annuities; liabilities bills, loan, debts outstanding; real estate land and buildings; investments and securities debentures, bonds, shares, managed funds; life insurance current policies; superannuation and any associated insurances; business interests owned businesses and partnerships; farming plant and livestock; an interest in the Estate of a deceased person or in a family trust; personal effects furniture, cars, jewellery etc. 5 Guide to Estate Planning, Administration & being a Beneficiary

7 Estate Planning Estate Planning involves the development of strategies for providing for the beneficiaries by protecting assets; and distributing the Estate according to your wishes in the most suitable and efficient way. Tasmanian Perpetual Trustees Estate Planning advisers provide advice on important issues that affect the estate and beneficiaries such as superannuation, life insurance and tax. Estate Planning can also be a comprehensive service resulting in the creation of a Will to provide instructions on the management and distribution of the Estate after death. It may also involve the granting of an Enduring Power of Attorney to provide a means of deciding who will manage business and legal affairs if a person ever became incapacitated and unable to make financial decisions. The benefits of Estate Planning Estate Planning is important to help your family and other beneficiaries to gain the maximum benefit from your Estate. The Estate Planning process can have the ability to protect the interests of the Estate for its beneficiaries, often in a tax effective way, and protecting assets in the event of a beneficiary s bankruptcy or divorce. This thorough Estate Planning process will also help to make the transition easier for beneficiaries by ensuring, so far as is practicable, that difficulties are minimised through plans that have been made to avoid potential complications. Wills prepared without first completing a full Estate Planning process may not take into account all personal and family circumstances and may put at risk the value of the Estate, leading to costly legal disputes. The Estate Planning process If required, our experienced Estate Planners will consult with your other professional advisers in order to gain a full understanding of the family financial position and wishes of the Willmaker. They will also use a comprehensive Estate Planning instruction checklist that covers all aspects of your situation. From this initial consultation an Estate Planning strategy is developed. A carefully developed Estate Planning strategy can help to: provide for the orderly transfer of property; effectively manage taxes on the Estate; equalise the inheritances for the beneficiaries if required; provide for any special needs of family members and other dependants; recommend the appointment of a guardian for minor children; ensure the availability of cash to pay necessary taxes and administrative expenses; identify the need to develop a succession plan for a family business; ensure the continued operation of a family business. 6

8 Wills A Will is a written direction that may describe the assets of your Estate and will name your beneficiaries (e.g. my children) who are to receive the Estate after your death. A Will should appoint a person or organisation that is responsible for distributing the Estate who is known as an Executor/s. A Will may also establish trusts for persons or charities, leave specific items to specific people, suggest guardians for infant children and give funeral instructions. A Will is always in writing and needs to be dated and signed by both witnesses and the Willmaker at the same time and preferably, using the same pen. 7 Why you should have a Will There are a number of important reasons why you should have a Will. In particular, a Will can lessen the emotional distress that occurs when you die by providing clear, concise and effective directions about who gets what and, if necessary, giving explanations for why things have been divided up in this manner. A Will directs how your Estate is to be distributed following death. The alternative is the inflexible and rigid distribution set out in Tasmanian legislation. Usually as soon as a person becomes of legal age, they may make a Will. Even if you only own a few assets, it is worthwhile making a Will and appointing an Executor to ensure certainty regarding what will happen to those assets after death. An Executor of a Will has immediate authority to act from date of death. If there is no Will, little can be done until the Court has confirmed the appointment of an Administrator a process that increases cost and could add many months to the time it takes to administer the Estate. Guide to Estate Planning, Administration & being a Beneficiary

9 Advantages of a Will By having a properly prepared Will you can: choose your own Executor to distribute the Estate, eliminating the necessity of a more costly appointment of an Administrator who may not be of your choosing; distribute property as you wish, including personal property of sentimental value; provide for future management of investments or a family business; record wishes for certain persons to be appointed guardians for minor children; utilise strategies to effectively manage taxation and administration expenses in the settlement of the Estate; provide for special wishes, such as to make charitable donations or establish bequests; and create testamentary trusts to protect assets for future generations. If you are visually impaired or English is not your first language Tasmanian Perpetual Trustees experienced Estate Planners can advise on these matters to ensure that valid Wills & Enduring Power of Attorney s can be prepared. If you die without a Will If you die without a Will, or what is known as intestate, your Estate will be distributed as set out in Tasmanian Law and administered by someone appointed by the Supreme Court, usually a person that has an interest in your Estate. The law is complex and may not provide for those you would want to benefit in the way you would like. 8

10 Wills continued Preparing a Will Even a straight-forward Will needs to do four things: 1) appoint an Executor; 2) sell or transfer all property after settling your debts as you decide; 3) make adequate provision for all those people for whom adequate provision ought to be made; 4) be dated, signed and correctly witnessed. A Will is an important document and needs to clearly identify what portion of your Estate will go to who after you die, while also considering an array of regulatory requirements. An incomplete and/or incorrectly signed Will can result in the Will not being legally effective and therefore unable to be administered completely or in part, when needed. It could also lead to the Estate being administered in a manner which was not intended. For these reasons trying to make a Will without professional assistance (using a Will kit purchased from a Newsagent, for example) may cause problems or difficulties down the track. It is too important to leave it to chance and hope that the Will has been made in a way that achieves the desired objectives. It is far better to do it through experienced professionals like Tasmanian Perpetual Trustees, who have the qualifications and experience to prepare your Will correctly. Revising a Will It is very important to ensure that your Will remains relevant at all times. Willmakers should never let a situation continue where their Will does not exactly reflect what is wanted or needed. A Will should therefore be reviewed every 2-3 years or when there are major changes in circumstances such as getting married or divorced, having children, or buying a property. Changes in taxation laws may also make Will revision necessary, but this is rare. There are also changes in circumstances that can automatically revoke a Will or make directions in a Will ineffective. Tasmanian Perpetual Trustees Estate Planning process helps you to anticipate your changing circumstances and helps avoid many of these problems. Consider the following: marriage usually revokes a Will unless it is expressly made in contemplation of that marriage; divorce usually revokes a Will unless it is expressly made in contemplation of that divorce; 9 Guide to Estate Planning, Administration & being a Beneficiary

11 if a significant relationship (also known as a defacto relationship) is started or ended, a Will may need to be changed because the Relationships Act 2003 considers most significant relationships to be the same as marriages when considering Wills; if someone named in the Will changes his or her name and the Will is not updated, there can be delays in completing the administration; if a beneficiary dies, the Willmaker may want that share to be divided among the beneficiaries children or given to the beneficiaries spouse; if specifically described property (e.g. 10 Jones Street, Petersville) is left to a beneficiary and that house is later sold, the beneficiary may receive nothing; a Will may need updating if significant changes occur in the nature of the Estate. For example, if a hotel is inherited or a farm purchased, or assets are transferred to a trust or partnership. Even if the beneficiaries do not need to change, the Executor may need different powers to deal with assets in the best possible way; if inflation erodes the real value of a gift of a specific sum of money; if the extent of a property in a bequest changes. For example, if all the shares or money in a particular account have been left to a particular person and shares are bought or sold or money is deposited or withdrawn, the beneficiary may get less or more benefit than intended unless the Will is changed; if the nature of the property in a specific bequest changes. For example, the type or name of bank account, share type, or holding (e.g. company takeover); if the circumstances of the beneficiaries change. For example, one of them may lose their house in a divorce and it might be fair for them to get a larger share from the Estate. Locating the Will As the last Will provides the instructions that an Executor needs for administering an Estate, it is important to ensure that it can be located when needed. Willmakers should ensure that their relatives or close friends know where the Will is kept. If a safety deposit box is used, ensure that someone trusted has access to it (usually your Executor) and also place a copy of your Will is held by your solicitor, accountant or trusted friend. Wills in safe custody: Tasmanian Perpetual Trustees will retain Wills in safe custody free of charge when they are appointed Executor. Contesting a Will If the result of statutory distribution of an Estate under an intestacy or the benefits provided under a Will leave immediate members of the family or other dependents in needy circumstances, they can apply to the Court for an order under family provision legislation for a larger part of the Estate to pass to them. This depends on their needs at the time of the application. It is important therefore, to carefully consider any situation where one beneficiary (particularly children) is favoured over another. There may be good reasons for doing so, however, they should be carefully documented and stored with the Will. They may be required by the Court to be produced as evidence of intention. The validity of a Will can also be challenged on the grounds that the Willmaker lacked testamentary capacity at the time of making the Will, was under duress, or that they did not know the document they were signing was in fact a Will. 10

12 Executorship Executorship is the name given to the process of administering and distributing the Estate of a deceased person to the beneficiaries of the Will. It is carried out by the Executor. An Executor can be a person, several persons, or a Trustee Company like Tasmanian Perpetual Trustees. The Executor is responsible for administering and distributing the property of the deceased. The job of an Executor is substantial, often complex, and Executors are personally liable for their errors. Selecting an Executor When deciding who will be the Executor, it is of utmost importance that the welfare of the beneficiaries is paramount. This depends upon the Executor s trustworthiness, business knowledge and acumen, impartiality in handling the Estate and ability to maintain proper records. The Executor must also be ready, willing and able to carry out promptly and efficiently all the duties of an Executor when the time arrives for them to act. You have the right to choose who will be your Executor. This right is one of the most important choices when making a Will. You may choose to name a family member or friend as Executor, or to make use of the knowledge and skills of professionals and have an experienced Trustee Company like Tasmanian Perpetual Trustees, as your Executor. Important considerations when choosing an Executor: Will they survive me? Will they be actually available when required? Will they have a conflict of interest if also a beneficiary? Are they competent in legal, accounting, taxation and wealth management? Duties of an Executor Some of the various duties of an Executor are listed on the following pages. Not all Estates will require all of these steps. The main duties of an Executor are the duty of care, the duty to act personally, and the duty to act in the best interests of all beneficiaries. 11 Guide to Estate Planning, Administration & being a Beneficiary

13 Executor s Map This section provides a broad overview of the steps an Executor such as Tasmanian Perpetual Trustees undertakes in administering an Estate. Locate and peruse Will Make funeral arrangements Preliminary conference with family, legal and business associates Advise beneficiaries and ascertain immediate needs of family Protect assets Insure all property Protect business interests Collect valuables and income Keep surplus funds invested Determines assets and liabilities Prepare statement thereof Super Cash Business interests Personal effects Securities Real estate Property interstate Debts due Debts owing Obtain Grant of Probate and attend to legal formalities Realise assets to pay liabilities including income tax to date of death Prepare accounting and tax information for beneficiaries Distribution of Estate Pay legacies and hand over specific bequests Obtain receipts Establishment of any trusts Transfer cash or assets to beneficiaries Prepare final statements for beneficiaries Continuing Estate Administration and asset management 12

14 Executorship continued Tasmanian Perpetual Trustees Estate Administration process Stage 1: Locate and examine the Will of the deceased. If necessary, make funeral arrangements. While this is an Executor s responsibility, immediate family usually prefer to deal with this. Assist beneficiaries where possible with immediate or emergency, personal requirements. Ensure all terms of the will are fully understood. Consult with Advisors able to provide financial information about the estate. Stage 3: Inspect and have valued any real estate. Check leases, mortgages and statutory outgoings such as rates and land tax. Determine values of all investments and arrange for collection of future income payments. Determine the deceased s interest in any other Estates or trusts. Determine any liabilities. Stage 2: Become familiar with the deceased s assets and business interests and take all necessary steps to protect property. If a private business is involved, take steps to arrange for suitable management, if necessary. Take an inventory and custody of cash, securities, jewellery etc. and other documents and records of value, from the residence and place of business of the deceased. Contact banks and other financial institutions for copies of current statements and to confirm details of securities held in safe custody, loans, and loan guarantees outstanding. Ascertain the particulars and adequacy of all personal and business insurance policies, including amount, benefits, terms and beneficiaries. Determine benefits, if any, due under government or corporate pensions or superannuation. Obtain details of any outstanding salary, death benefits, deferred profit sharing, medical, group life, or health insurance or any other possible amounts due arising from the deceased s employment. If the deceased s residence is now vacant, arrange for its protection and supervision, and specific insurance requirements for extended unoccupancy cover. Search the titles to all real estate in which the deceased had an interest. Stage 4: Prepare a detailed inventory of assets and liabilities as at date of death. Determine whether or not to apply for Probate. This application requires production of the original Will, Record of Death, assets and liabilities statement, affidavit of Executor and, in some cases, such as for poorly executed Wills, affidavits from the witnesses. Prepare and lodge any income tax returns required. With Probate formalities now dealt with, the Executor is in a position to administer the Estate, that is: to deal with the assets; settle the liabilities and income tax; pay legacies; satisfy general and specific bequests and gifts of real estate; make the final distribution; prepare final accounts to distribute estate; set up any ongoing trusts. 13 Guide to Estate Planning, Administration & being a Beneficiary

15 Administering the Estate Dealing with the assets: Cash - When authorised, close bank and investment accounts. Whenever feasible, invest part or all of cash balances until needed. Investments - Remove from the safety deposit box and take possession. Register in the Executor s name. Review to determine in consultation with beneficiaries which should be held and which (if any) are specifically bequeathed in the Will and which should be sold. Sell investments and securities as determined, to pay tax and other liabilities, as well as to provide cash for any bequests. Review regularly while the Estate continues. Real estate - Arrange sale or transfer to beneficiaries as the Will requires or as circumstances permit. Insurance, superannuation and annuities - Submit necessary claim forms and supporting documents to life insurance companies and/or Trustees and where they form part of the Estate, collect proceeds of life insurance, superannuation and annuity policies. Arrange for cancellation or transfer of general insurance on assets as they are transferred or sold. Household and personal possessions - Deliver to the beneficiaries all household goods, jewellery and other personal possessions that have been bequeathed. Arrange for the removal and sale of the balance of these assets, usually through an auctioneer. Private business - Arrange for or participate in, continuation and competent management of the business. Alternatively, arrange for its sale, winding up or transfer under the business succession agreement. Other assets - Deal with any other assets as required by necessity or by the Will. Note: The costs of transferring assets such as stamp duty and/ or legal fees may or may not be payable by the recipient, depending on the terms of the Will. It is important to take advice on this point. Settling the liabilities: Debts and liabilities - Advertise for creditors and other claims on the Estate. Check all claims and pay valid debts. Some credit cards have a death benefit feature (Executors should investigate this possibility). As funds become available, discharge any bank or private loans, mortgage payable and/ or business liabilities. Income tax - At death the deceased is generally deemed to have disposed of all property at fair market value at that time. Therefore, in addition to determining regular taxable income relative to the year of death, all the deceased s capital gains or losses (if any) as of the date of death must also be determined. If the surviving spouse or testamentary trust receives the entire Estate, it is possible that no capital gains tax will be payable until that spouse dies. Advice may be required on this point. Prepare an income tax return for the portion of the year to the date of death, and for any previously unassessed period. Pay taxes and obtain final assessment. Prepare income tax returns for the Estate annually until wound up, and advise beneficiaries of taxable income, if any, allocated to them and upon which they are liable for income tax. Other duties or taxes - Make a reserve for duties or taxes in respect of foreign jurisdictions and instruct a suitable professional to prepare and file returns. Settle any balances owing and obtain discharges. Distributing the Estate The following must be considered by an Executor of an Estate at distribution time: terms of the Will; transfer assets directly to beneficiaries; payment of legacies; hand over of bequests; prepare Estate accounts; accounting to beneficiaries including taxation information; transfer of gifts of real estate; ensure that distributions are equal in value where required; cash distributions; capital gains tax implications; provide taxation information including capital gains tax information; final distributions. 14

16 Enduring Power of Attorney An Enduring Power of Attorney is a legal appointment that gives a person or organisation the ability to make decisions and sign documents on your behalf. This agreement is represented by documentation that details the agreement to give a specified person, persons or organisation the power to deal with your assets and financial affairs while you are still alive but unable for any reason to act personally. The benefits of an Enduring Power of Attorney An Enduring Power of Attorney enables you to take action now to ensure that your best interests are safeguarded if you lose your ability to make decisions or sign documents personally. This ensures that a trusted person attends to essential matters at the right time. An Enduring Power of Attorney may lie dormant for years if need be but importantly it is there and ready to be used when required. If you were unexpectedly prevented from attending to your financial matters through illness or absence, imagine the problems that could arise. 15 Guide to Estate Planning, Administration & being a Beneficiary

17 The following are some examples of how an Enduring Power of Attorney can be used: use your available funds to pay your everyday expenses and those of your family; collect Centrelink, Medicare, or other Government benefits; invest your money; handle transactions with banks and other financial institutions; buy and redeem insurance policies and annuities; lodge taxation return and pay taxation assessments; operate your small business; claim property you inherit or are otherwise entitled to; hire someone to represent you in court; manage your investments. Who should be an Attorney? An Enduring Power of Attorney gives a person, or organisation called an Attorney, the power to act and sign on behalf of another when required. This person nominated may be: a relative; a friend; an associate; Tasmanian Perpetual Trustees. Your Attorney becomes your agent and the decisions that they make are binding. Therefore it is very important to choose an Attorney that will actually be available when needed and is reliable, trustworthy and experienced. You can appoint more than one Attorney. For example, you may appoint initially a spouse and if unable to act, appoint Tasmanian Perpetual Trustees in substitution to be your Attorney to look after your financial affairs. Types of Power of Attorney There are two types of Power of Attorney; an Enduring Power of Attorney and a General Power of Attorney. The Powers of Attorney Act 2000 provides that if you grant an Enduring Power of Attorney you must first understand that they: (a) may specify or limit the power to be given to an attorney and also instruct an attorney about the exercise of the power; (b) know when the power will begin; (c) know that once the power for a matter begins, you still have power to make, and will have full control over, the matter subject to terms or information about exercising the power included in the Enduring Power of Attorney; (d) know you may revoke the Enduring Power of Attorney at any time while you retain the mental capacity to do so; (e) know that the powers you have given continue even if you subsequently lose their mental capacity; (f) know that they will be unable to oversee the use of the power if they subsequently lose mental capacity. An Enduring Power of Attorney allows financial or legal decisions to be made on your behalf even if you lose the capacity to make them yourself. However, with regard to personal, medical or lifestyle decisions an Enduring Guardian must also be appointed. An Enduring Power of Attorney may begin operating at a specified time and may continue to operate even if you lose the ability to make decisions for yourself at some time in the future. The Enduring Power of Attorney ceases to operate on death. The Will then becomes the legal document to dispose of your Estate and your Executor commences the Estate Administration. A General Power of Attorney is basically the same as an Enduring Power of Attorney except that it ceases to operate when your capacity to make decisions is lost, which is probably when it is needed most. This is why most Powers of Attorney made these days are Enduring Powers of Attorney. Both a General and an Enduring Power of Attorney can be limited to certain types of transactions, or for a specified period of time, or for a defined set of circumstances. 16

18 Enduring Power of Attorney continued 17 When should a Power of Attorney be considered? Power of Attorney and Tasmanian Perpetual Trustees A Power of Attorney can only be made when you are capable of making decisions for yourself. It can be made at any time so that it is ready, if and when it is needed. For this reason it is often suggested that an Enduring Power of Attorney document be prepared at the same time as a Will. People should also consider making an Enduring Power of Attorney if they are planning to travel overseas or are failing in health. By appointing an Enduring Power of Attorney to act at these times, your best interests are safeguarded if the ability to make decisions independently is lost, even temporarily. If decision making ability is lost through illness, accident or trauma and a Power of Attorney has not been made, it may be necessary for an Administrator to be appointed to make those decisions. The Guardianship and Administration Board of Tasmania chooses the Administrator. The Administrator appointed by the Board may not be the same as the disabled person would have chosen for themselves. Acting as an Attorney is often a responsibility best given to a trained professional rather than a burden put on friends or family. Tasmanian Perpetual Trustees can prepare a Power of Attorney to be held on a contingency basis. If Tasmanian Perpetual Trustees is appointed as Attorney, an account manager who the family can speak to, in complete confidence is appointed. This account manager will work closely with the family to ensure that your best interests will be looked after should the Enduring Power of Attorney need to be activated. Tasmanian Perpetual Trustees will hold the Power of Attorney with the understanding it is only to be used on instructions or in the case of emergency. Naturally, you retain the right to revoke the Power of Attorney at any time. If the Power of Attorney is activated, records are maintained and regular financial statements issued. As well as being an experienced member of the Tasmanian Perpetual Trustees team, the account manager is supported by in-house specialists that can assist with investments and income tax. Guide to Estate Planning, Administration & being a Beneficiary

19 Administration under Guardianship and Administration Orders If you have not made an Enduring Power of Attorney and subsequently become incapable through injury or illness of managing your own financial affairs or require decision-making assistance, you may need to have guardians and administrators appointed by the Guardianship and Administration Board to look after you. Tasmanian Perpetual Trustees, when appointed as an Administrator by the Guardianship and Administration Board, can also manage the financial interests of a client and advise on a variety of financial and legal issues. Enduring Guardianship When granting an Enduring Power of Attorney, consideration should also be given to appointing an Enduring Guardian. An Enduring Guardian is someone to make lifestyle decisions for you if, as a result of an accident, illness, or some other event, you lose your intellectual capacity to make reasonable judgements about your future lifestyle conditions. Decisions such as: where you should live e.g. to continue to live at home or move into a nursing home; the health care or medical treatment you should receive; other personal services you should receive e.g. home support, meals on wheels etc. An example of the need for an Enduring Guardianship is set out below. You are ill and your condition is worsening. You can no longer live at home on your own, intellectually, you are unable to make a decision about where to live. Your daughter wants you to live at her home and she has made arrangements for this, however your son believes you will be best cared for in a nursing home. Prior to losing capacity, you appointed an Enduring Guardian. The decision of where you will live once you have lost capacity is for your guardian to make. 18

20 Being a Beneficiary Many people feel that becoming a beneficiary often comes at a very high price; the death of a loved one. Receiving an inheritance can be an overwhelming experience and Tasmanian Perpetual Trustees has prepared this guide to assist you to understand the process of Estate and Trust Administration, as a beneficiary. We hope that after reading this guide you will know what to expect from us, what we do in our role and how and when you will receive reports on the progress towards finalising your inheritance. We trust you will better understand the part you play and how Tasmanian Perpetual Trustees can help you to plan for this change in your circumstances. Usually, the Estate Administration process is completed within 6 to 9 months, although each case will depend on its own particular circumstances. Although the Administration and Probate Act 1935 allows an Executor a year to complete Estate Administration, we strive to ensure beneficiaries receive their inheritances as soon as is reasonably possible, depending on the circumstances of the Estate. This Guide is not intended to be legal or financial advice and Tasmanian Perpetual Trustees accepts no liability for people acting on information contained in this Guide. Any references to legislation are generally to Tasmanian legislation. 19 Guide to Estate Planning, Administration & being a Beneficiary

21 What is Estate Administration? Estate Administration is the process of dealing with the assets and liabilities of a deceased person according to their Will and/or the law. Estate Administration includes identifying, collecting and protecting assets, obtaining Supreme Court authority, paying debts of the Estate and selling or transferring the remaining assets of the Estate to the beneficiaries. A detailed map of the general process is on page 12. There are two broad categories of deceased Estates: 1. Estates that are immediately distributable to the beneficiaries. 2. Estates that create trusts that go on for some time and are distributed to the beneficiaries either for the duration and/or at some future point in time. It is also possible for part of an Estate to be immediately distributable and another part or parts of it to be held on trust. For example if a legacy is left to a person aged under 18 it will be held in trust for them until they reach that age. Parts of an Estate held in a Trust are discussed under What if a Trust is created? The Estate Administration phase must be completed before the trustee phase commences. In general the Estate Administration process at Tasmanian Perpetual Trustees goes through three main stages: 1. pre-probate stage 2. post-probate stage 3. distribution stage The following sections provide more detail about each of these stages. 20

22 The pre-probate stage The pre-probate stage generally takes 2-3 months from the date of death and is completed by lodging the application for Probate in the Supreme Court of Tasmania. During the pre-probate stage Tasmanian Perpetual Trustees will advise beneficiaries of their entitlement, identify and protect the assets of the Estate, undertake a number of administrative steps and prepare to apply for Probate of the Will. We will also commence a discussion with you regarding your inheritance and how to plan to receive it. Tasmanian Perpetual Trustees will: read the Will and understand its directions thoroughly, seeking legal advice if required; meet with those beneficiaries able to attend and collect any information that is needed; apply to Births Deaths and Marriages for a copy of the Death Certificate; send copies of the Will to all eligible adult Beneficiaries; redirect mail; if a business is involved, consider legal and other requirements for suitable management; arrange an inventory of personal property if required; obtain a professional valuation of any real estate (if owned); cancel driver s and other licences; claim medical expenses; cancel memberships (such as RACT) and seek refunds; cancel private health insurance and seek refund; sell household items, vehicles etc (if any and if not given to a beneficiary); cancel any insurance covers (once assets sold or transferred) and seek refunds; notify home and contents insurer (if the residence is unoccupied); write to share registries to confirm the Estate s shareholdings and dividends paid in the financial year; write to all professional advisors to clarify details of the Estate assets such as superannuation and other managed investments; write to the accountant who prepared tax returns (if any) to obtain copies of previous years returns (these help to check that all assets have been accounted for); write to banks and other financial institutions to confirm the Estate s accounts, balances and interest paid in the financial year; construct tax records, including details of asset acquisitions for capital gains tax purposes; record all the assets of the Estate, including capital gains tax information; formally identify beneficiaries; cancel any Centrelink payments and obtain a payment summary; apply for an Estate Tax File Number; arrange for the temporary safekeeping of any bequests; seek early release of funds from the deceased s financial institution to obtain the funeral account discount for early payment; commence preparation of the final personal income tax return; prepare the application for Probate. Not all of these steps are needed in all cases. They may not take place in the order presented here and some of them may be undertaken at the same time. 21 Guide to Estate Planning, Administration & being a Beneficiary

23 The post-probate stage Once probate has been granted, Tasmanian Perpetual Trustees usually commences the process of collecting or selling assets and paying liabilities. The post-probate stage generally takes 2-3 months depending on the nature of the assets and time taken to consult with beneficiaries regarding the disposal and/or transfer of assets. Depending on the particular circumstances of the Estate, some or all of the following steps will be undertaken. Tasmanian Perpetual Trustees will: close the bank accounts, deposit the proceeds in the Estate account and record the interest paid; sell any investments that are to be sold; advertise notice for claims in newspapers and the Government Gazette (see beside); arrange the sale of any real estate if required (see detailed section on page 25); pay debts and file receipts; lodge the final personal income tax return; determine the division of assets of the Estate between those beneficiaries who want assets and those who want cash; calculate the cash shares of the Estate to be inherited by the residuary beneficiaries and consult with them about how it is to be distributed; commence preparation of distribution statements of assets and liabilities of the Estate. A Notice for Claims is based on the following prescribed format and it must be advertised in The Tasmanian Gazette and one other Tasmanian newspaper circulated in the district where the deceased resided. NOTICE FOR CLAIMS SAMPLE PERSON late of 123 First Street, Secondville in Tasmania, Occupation, Marital Status, Deceased. Creditors, next of kin and others having claims in respect of the property or Estate of the deceased, SAMPLE PERSON who died on the ( xx / xx / xx ) are required by the Executor, TASMANIAN PERPETUAL TRUSTEES LIMITED of Hobart in Tasmania, to send particulars to the said Company by the ( xx / xx / xx ), after which date the Executor may distribute the assets, having regard only to the claims of which it then has notice. Dated this ( xx / xx / xx ) TRUST ADMINISTRATOR There are two main reasons for advertising notice for claims: firstly, to enable any creditors to notify claims to the Executor and secondly, to require any persons who believe that they have a claim against the Estate because they have been excluded or inadequately provided for, to notify a claim or to make application to the Supreme Court under family provision legislation for a larger part of the Estate. Family Provisions Law Tasmanian Law provides that adequate provision from an Estate is made for immediate family, where there is a responsibility to provide. Eligible claimants include a spouse or partner and children. Whilst a Willmaker may choose not to make adequate provision, eligible claimants still have the right to apply for a Judge of the Supreme Court of Tasmania to consider if the distribution of the Estate is an adequate provision. The powers of the Judge are very wide indeed. This legislation also obliges an Executor not to commence distribution of the Estate until three months following the granting of Probate to ensure claimants have reasonable time to apply. This waiting period is frequently a source of frustration to some beneficiaries, however it is unavoidable and protects the interests of the beneficiaries, prospective claimants and the Executor/Administrator. 22

24 The distribution stage At this stage, the Estate Administration process is nearing completion. Depending on the particular circumstances of the Estate, the distribution stage will generally follow the steps below. Tasmanian Perpetual Trustees will: receive the final personal income tax assessment and pay it (if required); commence preparation of first and final estate income tax return (if required); confirm that Notice for Claims period has expired; confirm that Family Provisions Claims period has expired; check that all assets have been sold, transferred or collected by reconciliation receipts with the original statement of assets and liabilities; distribute cash and assets to all eligible beneficiaries as agreed; establish any required Trusts (see page 28); pay all final administration and expenses; pay legacies; provide financial statements to residuary beneficiaries. The distribution stage will not usually commence prior to the expiration of three months from the grant of probate and is dependent on the complexity of the assets involved. 23 Guide to Estate Planning, Administration & being a Beneficiary

25 Planning for your inheritance It is important not to make hasty decisions regarding your inheritance. You should first consider your longer term plans for your inheritance. At this point you may find it helpful to consult with one of MyState Wealth Management s Financial Planners to explore the wide range of options available. Financial Planning provided as part of this service is offered through MyState Wealth Management - a registered business name of Tasmanian Perpetual Trustees Limited. Some common questions asked by beneficiaries include: Should assets or investments be sold, retained or transferred? Is it better to pay off debts or invest the inheritance? Are there any tax consequences for receiving the inheritance? Is superannuation better than other types of investments for me? What is the impact of my inheritance on any Centrelink or Department of Veterans Affairs pension? To ascertain what is the best investment plan for you involves working through a range of issues including tax, your personal, family and financial situation as well as your needs and expectations now and in the future. A consultation with a MyState Wealth Management Financial Planner is offered as part of the Estate Administration service and this will generally help you to make the best choices for you. The Trust Administrator handling your inheritance will help you make an appointment with one of MyState Wealth Management s Financial Planners. What if you are not ready to make any decisions? Many people feel they are not ready to make financial decisions at this stage. It can take time to deal with the situation and consider the options. Tasmanian Perpetual Trustees also offers an At Call Fund* cash management account where you can simply park any funds from your inheritance until you decide what to do. Should you choose, your inheritance funds are available to you at call whenever you want, and you do not have to give notice for withdrawals. It is the ideal way to safeguard your inheritance and earn a competitive rate of interest at the same time. * Tasmanian Perpetual Trustees Limited ABN AFS Licence is a wholly owned subsidiary of MyState Limited ABN is the responsible entity of the Fund. Beneficiaries interested in investing in the Fund need to complete an Application Form attached to the current Product Disclosure Statement that is available at any Tasmanian Perpetual Trustees office or it can be mailed to you on request. Before making any investment decision, beneficiaries should consider taking professional advice. 24

26 Sale of real estate If real estate is to be sold the following process is generally followed. Not all property sales will require all of these steps. If required the Trust Administrator will arrange the sale in accordance with Tasmanian Perpetual Trustees Real Estate Procedure, any directions in the Will and in consultation with beneficiaries where this is possible. Where all beneficiaries are adults and have vested interests, Tasmanian Perpetual Trustees will always endeavour to consult closely. Ultimately it is your Executor that is responsible and must make the final decisions in the interests of all beneficiaries. Tasmanian Perpetual Trustees will: ensure the title documents are located and in order; obtain a professional valuation (if not already held) and Agent marketing appraisals; advise relevant beneficiaries of valuations, appraisals and sale options; determine the appropriate sale process (see inset beside); consider marketing proposals; select a real estate agent; appoint conveyancing solicitor; sign agent s authority; ensure the property is well presented; review contract and negotiate and/or consider any special conditions; receive and reconcile settlement proceeds. Auction or private treaty? The Executor s duty is to achieve the best market price. The difficulty is that it can never be determined which sale method will get the best price, as the same property cannot be sold several times at once to find out. Generally, Tasmanian Perpetual Trustees prefers to sell real estate by public auction (with a reserve price based on valuation), in order to test the market in a fair and open way. If all beneficiaries are adults with vested interests and unanimously prefer then other methods of sale can be considered. If a property does not sell it will usually then be offered by private treaty within an agreed listing price range. 25 Guide to Estate Planning, Administration & being a Beneficiary

27 Tasmanian Perpetual Trustees will act in your best interests Tasmanian Perpetual Trustees was established over 120 years ago in order to provide a safe and secure way for people to ensure that the fruits of their life s work pass safely and securely to their heirs. This mission continues today and is why many Willmakers choose to have Tasmanian Perpetual Trustees act as their Executor. Tasmanian Perpetual Trustees has a practised system for Estate Administration that ensures that all i s are dotted and all t s crossed. Tasmanian Perpetual Trustees experience minimises the prospect for difficulties but if they arise, a management plan can be quickly developed to overcome them. What you can expect You can expect the following service standards to be met when dealing with Tasmanian Perpetual Trustees and the Trust Administrator who is handling your inheritance. Phone calls Correspondence Accuracy Completeness Calls will be generally returned within 24 hours. You will be given the direct number of the Trust Administrator handling your inheritance. Correspondence will be generally replied to within seven business days. You can expect that all information given to you will be accurate. You can expect that the information given to you is complete so far as is known at the time. 26

28 Rights, powers and duties of the Executor The principal duty of an Executor is impartially administer the terms of the Will acting in the best interest of all the beneficiaries. Executors have a range of rights, powers and duties. These may be found in the Will and in various legislation (such as the Administration and Probate Act 1935) and others from Common Law. Rights, powers and duties are often discretionary and exercised in consultation with the beneficiaries. Executor s rights include: an Executor has the right to have probate granted to them; an Executor has the right to have their out-of-pocket expenses reimbursed by the Estate; an Executor has the right to have the title to the Estate assets vested in them pending distribution; an Executor has the right to indemnity from the Estate assets except in cases of fraud or negligence; an Executor may have the right to sell or not sell Estate assets as they consider appropriate. Executor s powers include: an Executor has the power to insure Estate assets; an Executor has the power to appoint agents; an Executor has the power to engage professional advisors and to pay their costs from the Estate; an Executor has the power to pay liabilities of the Estate; if agreed, an Executor has the power to distribute assets of the estate to beneficiaries as part of their inheritance. Executor s duties include: an Executor has a duty to adhere to the terms of the Will; an Executor has a duty to administer the Estate within a reasonable time; an Executor has a duty to make an inventory of assets of the Estate; an Executor has a duty to treat all beneficiaries within a class (e.g. all residuary beneficiaries) the same; an Executor has a duty to account to the beneficiaries for the financial administration of the Estate; an Executor has a duty to protect Estate assets. 27 Guide to Estate Planning, Administration & being a Beneficiary

29 What if a Trust is created? Often Trusts are created in Wills for various reasons. For example, Trusts can be created to hold inheritances for children until they reach a certain age or to provide ongoing income and benefit for a beneficiary for life (Life Tenant). A Life Tenant may also be entitled to use and enjoy real estate for life. In many cases the terms of the Trust or legislation also allows for the residence to be let or sold, and the proceeds invested or used to purchase another residence in order to meet the Life Tenant s current needs. Role of the Trustee and the beneficiaries The primary role of the Trustee is to manage the Trust property in order to achieve the objectives of the Trust. The Trustee will do this in different ways, depending on the nature and circumstances of the Trust. For Trusts where the inheritance is to be held for a beneficiary who is a minor, the Trustee may, in consultation with the parents or guardians, be able to pay an amount from the ongoing income of the Trust for the beneficiary s maintenance, or towards their schooling or education expenses. The Trustee may also be able to pay Trust capital for approved purposes such as housing, education or other reasonable expenses, if the Trustee believes this to be in the beneficiary s best interests. 28

30 What if a Trust is created? continued For Trusts established for Life Tenants, the Trustee has to balance out the need for income to support the Life Tenant as well as the reasonable expectations of the ultimate or remainder beneficiaries for capital growth in the investments. The Trustee weighs up these sometimes competing priorities in the annual investment review process described below. Annual cycle As the Trustee, Tasmanian Perpetual Trustees will: prepare and lodge an income tax return; determine or review the Trust investment strategy; review Trust investments and make changes in line with the Trust investment strategy; send a statement of account to relevant beneficiaries; send a tax statement to the Life Tenant. Investment review The Trustee Act 1898 requires that Trustees at least annually review the investment portfolio of a Trust, having regard to certain matters. The purposes of the Trust and the needs and circumstances of the beneficiaries. The desirability of diversifying Trust investments. The nature of existing Trust investments and other Trust property. The need to maintain the real value of the capital or income of the Trust. The risk of capital loss or depreciation. The potential for capital appreciation. The likely income and the timing of the income return. The length of the term of the proposed investment. The probable duration of the Trust. The liquidity and marketability of the proposed investment during, and on the determination of, the term of the proposed investment. The aggregate value of the Trust Estate. The effect of the proposed investment in relation to the tax liability of the Trust. The likelihood of inflation affecting the value of the proposed investment or other Trust property. The costs, including any commission, fee, charge or duty payable, of making the proposed investment. The results of a review of any existing Trust investments. As a result of this annual review the Trustee will invest the Trust assets in a range of investments to achieve the purposes of the Trust. A fee is charged to the Estate for this review. 29 Guide to Estate Planning, Administration & being a Beneficiary

31 Statements Statements are sent annually to life tenants and remainder beneficiaries. Statements for Trusts for children are sent to their parents or guardians until the child is 18. Tax statements are also sent each year to income beneficiaries to ensure they include taxable amounts in their personal tax return. 30

32 Death of life tenant On the death of the life tenant, generally the assets of the Trust become available to the remainder beneficiaries. Upon the death of the life tenant Tasmanian Perpetual Trustees will: calculate any final income entitlement due to the Estate of the life tenant; estimate the share of the Trust to be inherited by the remainder beneficiaries and consult with them about how it is to be distributed; consider the sale or transfer of assets; determine the division of the assets of the Trust between those beneficiaries who want assets and those who want cash (this step is completed in consultation with beneficiaries); prepare final Trust income tax return; pay all final expenses; distribute cash and assets as agreed; provide final financial statements to remainder beneficiaries. Beneficiary attains specified vesting age Some Trusts are established to enable beneficiaries to take their inheritance after they reach a certain age. In this situation Tasmania Perpetual Trustees will: consult with the beneficiary about how the Trust is to be distributed; consider the sale or transfer of any assets; prepare final Trust income tax return; pay all final expenses; distribute cash and assets as agreed; provide final financial statements to the beneficiary. 31 Guide to Estate Planning, Administration & being a Beneficiary

33 You and Tasmanian Perpetual Trustees Regardless of the size of your Estate, Tasmanian Perpetual Trustees can help you plan to achieve the maximum benefit for the beneficiaries of your Estate. A relationship with Tasmanian Perpetual Trustees provides many advantages, particularly at the present time when changing market conditions call for close attention to planning and investments. Tasmanian Perpetual Trustees pays careful attention to trends in investment planning, taxation and other current economic matters. This knowledge will be of great value to you long before the work of actual Estate Administration begins and it can be particularly valuable where the investment of funds on behalf of children is concerned. Comprehensive financial planning and investment advice is also available. Tasmanian Perpetual Trustees has the knowledge and experience to assist you with a comprehensive Estate Planning process that includes a Will and Power of Attorney and your Will ensures that your Estate will be transferred in accordance with your wishes. Your Power of Attorney also provides a means of deciding who will manage your financial and legal affairs if you are ever unable to do so yourself. The experienced staff at Tasmanian Perpetual Trustees have the expertise to provide you with high quality Estate Planning services that are tailored to your personal requirements. 32

34 Appointing Tasmanian Perpetual Trustees as an Executor Being an Executor can be a difficult and challenging exercise. It is generally best given to professionals who have the expertise and skills to ensure that your Estate is managed as efficiently and effectively as possible. There are many reasons why it is a good idea to appoint Tasmanian Perpetual Trustees as an Executor. Complexity of the law - The law relating to Executors and the administration of Estates is complicated. An ordinary person who is appointed as Executor is generally unfamiliar with the law and its intricacies. Appointing a friend or family member as Executor could place a heavy responsibility on that person and the Estate could suffer through inexperience. Usually, inexperienced Executors will generally need to be guided by and rely on a lawyer and accountant, who will charge professional fees for their services. Availability - A friend or family member may not be available when the time comes. They may die before you, may fall ill or die during the Executorship, may have moved out of the State or country or are otherwise unable to act. Tasmanian Perpetual Trustees does not grow old, become ill, or die, or move away and will always be available when you need them. Conflict - Conflicts sometimes occur between beneficiaries. An individual, private Executor may be swayed by pressure or preferences. Tasmanian Perpetual Trustees remains impartial and treats all beneficiaries with equal consideration. These are a few examples which show why you should choose your Executor wisely. To ensure personalised attention to the interests of all beneficiaries combined with speed, safety and certainty in Trust administration, appointing Tasmanian Perpetual Trustees is a wise choice. The specialist staff at Tasmanian Perpetual Trustees are trained and experienced in all aspects of trustee work. It can also be the case that family members or friends acting as Executors can be quite costly. It is not always correct to assume that it is more economical to appoint a relative or friend as Executor. Private individuals often make the most expensive Executors. The volume of work required is large, even in the case of a small Estate, and is often beyond the unassisted capacity of an inexperienced Executor The law relating to Estates and taxation is complex and the inexperienced Executor may often sacrifice money unnecessarily due to lack of knowledge or sheer inability to cope with the amount of work. It is also worthwhile to consider the cost for legal, accounting and taxation advice to bring a private Executor up to speed. When you appoint Tasmanian Perpetual Trustees as your Executor you will have peace of mind knowing that its operations are strictly controlled by law to ensure the safety of the Estate and the interests of beneficiaries. Tasmanian Perpetual Trustees was established in 1887 to be an impartial and professional Executor and Trustee for Tasmanians and over 120 years later this remains a core part of its expertise and reputation. Tasmanian Perpetual Trustees has faithfully administered many thousands of Estates entrusted to its care and by appointing them as your Executor you are assured of security and continuity of service. 33 Guide to Estate Planning, Administration & being a Beneficiary

35 You and Tasmanian Perpetual Trustees continued Fees and Commissions Professional Fees In common with other professional service providers, Tasmanian Perpetual Trustees charges fees for providing services. We believe our fees are fair and competitive. All fees and charges are inclusive of GST and are current at date of printing. Fees and charges quoted in this Guide are the maximum rates that apply at the time of publication and are subject to variation at our discretion. Lower fees may be individually negotiated at our discretion or may also apply to some pre-existing estates administrations, trusts administrations and other financial administrations and can be confirmed individually to affected parties. Estate Planning The fee to prepare a new Will or revise an existing Will (where Tasmanian Perpetual Trustees is appointed an Executor): Single person $143 - new Will $110 - Will revision Couple $220 - new Will $165 - Will revision The fee to prepare a new Will or revise an existing Will (where Tasmanian Perpetual Trustees is not appointed the Executor): $495 single person (basic Will)* $660 couple (basic Will)* * If the Will is complex an hourly fee of $275 will apply. Fees include preparation of an Enduring Power of Attorney. A fee agreed at the time of confirming your appointment may be charged to meet our costs incurred to travel to your home if you are unable to attend at one of our offices. A discount of 10% will apply to holders of a Seniors Card or an Australian Government Pensioner Concession Card. Gross value of the Estate Maximum flat rate of capital commission applied to the gross value of the Estate* $0 to $100,000 Minimum fee of $5,500 applies $100,001 to $300, % $300,001 to $500, % $500,001 to $1,000, % $1,000,001 to $2,000, % Above $2,000, % * The following assets are NOT counted as part of the Estate and therefore are excluded from capital commission charges: assets held as joint tenants (e.g. where the deceased might own a home as joint tenants with his or her partner); and superannuation and life insurance assets which are not paid to the Estate (e.g. where the policy specifically nominates a beneficiary and the benefit is paid directly to that nominated beneficiary). Family Beneficial Rate A Family Beneficial Rate* of 3.3% will apply to the transfer (not sale) of real property for Estates under $1,000,000, otherwise aforementioned scale of fees will apply. *The Family Beneficial Rate applies to a spouse (husband, wife or significant relationship as defined by the Relationships Act 2003) and children including adopted children and step children. Estate Administration - Capital Commission When Tasmanian Perpetual Trustees acts as Executor or Administrator, it provides a premium service covering the full range of administrative and legal services usually necessary to complete the Estate Administration. The fees reflect the expertise and effort required to fulfil legal and associated responsibilities, the personalised nature of our service and the benefits we provide in terms of impartiality, peace of mind and security. 34

36 Example of the impact of fees and commissions on an Estate (value of $205,000) Type of Assets of Deceased Asset Values Estate Commission Explanation Family Home in Joint Names $350,000 No Commission Family Home in joint names (Joint Tenants) with spouse - not part of the Estate - no commission payable. Furniture and Effects $25,000 No Commission Furniture and effects owned jointly with Spouse - not part of the Estate - no commission payable. Motor Vehicle $10, % Commission Motor Vehicle in name of deceased - will be sold or transferred depending on terms of Will - commission payable. Life Insurance $150, % Commission No nominated beneficiary and proceeds paid to the Estate - commission payable. Superannuation $200,000 No Commission A nominated beneficiary and proceeds paid by the Superannuation Fund directly to the nominated beneficiary and therefore is not part of the Estate - no commission payable. Managed Funds $50,000 No Commission Managed Funds in joint names with Spouse - not part of the Estate - no commission payable. Share Portfolio $40, % Commission Shares all held in the sole name of the deceased and forms part of the Estate - will be transferred or sold depending on the terms of the Will - commission payable. Cash $5, % Commission Cash held in the sole name of the deceased and forms part of the Estate - commission payable. Value of the Assets of the Deceased $830,000 (including jointly owned) Estate Value $205,000 Commission 5.5% $11,275 Distribution to Beneficiaries $193,725* * excludes consideration of out of pocket, incidental and testamentary expenses which would also be deducted from the Estate. Example of the impact of fees and commissions on an Estate (value of $550,000) Type of Assets of Deceased Asset Values Estate Commission Explanation Family Home in Joint Names $350,000 No Commission Family Home in joint names (Joint Tenants) with spouse - not part of the Estate - no commission payable. Furniture and Effects $25,000 No Commission Furniture and effects owned jointly with Spouse - not part of the Estate - no commission payable. Motor Vehicle $10, % Commission Motor Vehicle in name of deceased - will be sold or transferred depending on terms of Will - commission payable. Life Insurance $150, % Commission No nominated beneficiary and proceeds paid to the Estate - commission payable. Superannuation $200,000 No Commission A nominated beneficiary and proceeds paid by the Superannuation Fund directly to the nominated beneficiary and therefore is not part of the Estate - no commission payable. Managed Funds $140, % Commission Managed Funds in sole name Share Portfolio $205, % Commission Shares all held in the sole name of the deceased and forms part of the Estate - will be transferred or sold depending on the terms of the Will - commission payable. Cash $45, % Commission Cash held in the sole name of the deceased and forms part of the Estate - commission payable. Value of the Assets of the Deceased (including jointly owned) $1,125,000 Estate Value $550,000 Commission 3.3% $18,150 Distribution to Beneficiaries $531,850* * excludes consideration of out of pocket, incidental and testamentary expenses which would also be deducted from the Estate. 35 Guide to Estate Planning, Administration & being a Beneficiary

37 You and Tasmanian Perpetual Trustees continued Income Collection Fee For income collected whilst administering an Estate, a Trust or a client s financial affairs under an Enduring Power of Attorney or an Order of the Guardianship and Administration Board, if no Ongoing Trust Fees apply, a fee of 5.5% of the income received will be charged. Ongoing Trust Administration If an ongoing Trust is administered, for example to provide for infant or vulnerable beneficiaries, a Trusteeship fee of 1.1% p.a. is charged on the gross value of Trust assets, from the time the Trust is established and for its duration. This fee will cover the ongoing care, maintenance and administration of the Trust. Fees may be charged to the Trust for specialist advice. Power of Attorney and Guardianship Orders If a client s assets are managed or administered under the enduring provisions of a Power of Attorney or under an Administration Order of the Guardianship and Administration Board because the client suffers a loss of intellectual competency, a management fee of 1.1% p.a. or $1,500 p.a. (whichever is the greater) is charged on the gross value of the assets managed or administered in this trust capacity from the time of appointment and for its duration. This fee will cover the ongoing care, maintenance and administration of the trust. Fees may be charged for specialist advice. Out of Pocket Expenses To cover incidental and out of pocket expenses incurred during the administration of an Estate, such as postage, photocopying, facsimile and telephone costs, or travelling, a charge of $110 per residuary beneficiary and $55 per legatee, will apply. A fee of $9.90 will also apply for the processing of each Electronic Funds Transfer (EFT) or for the preparation and drawing of a cheque. 36

38 You and Tasmanian Perpetual Trustees continued Taxation & Accounting Services Tasmanian Perpetual Trustees make the following charges when it provides taxation and accounting services: 1. Where Tasmanian Perpetual Trustees acts as executor, administrator or enduring attorney - analysis and assessment of client s annual or final personal taxation obligations including the preparation of a non complex personal return, review of notice of assessment and processing any applicable payment or refund - minimum fee $297.00; thereafter $ per hour calculated on time taken. 2. Where Tasmanian Perpetual Trustees acts as executor, administrator or trustee - analysis and assessment of estate or trust s annual or final taxation obligations and taxation clearance for distribution including the preparation of a non complex trust return, the preparation of up to two beneficiary advices, review of notice of assessment and processing any applicable payment or refund - minimum fee $297.00; thereafter $ per hour calculated on time taken. 3. Preparing and lodging an application for a tax file number including creating/maintaining client or Trust s electronic taxation record and Australian Taxation Office (ATO) electronic lodgement program - $ Professional taxation advice (including requests for ATO rulings or external taxation advice); preparation, lodgement and reviewing assessments for complex returns; preparation and lodgement of business and instalment activity statements; other taxation and accounting services - $ per hour calculated on time taken. Where external Tax Agents and Accountants are appointed by Tasmanian Perpetual Trustees to prepare and lodge individual and trust returns or provide taxation and accounting advice, the external provider s scale of fees and charges will apply. Company Policies and Procedures The following Policies and Procedures are available at every branch or can be downloaded from Code of Conduct Complaints Handling Procedure Privacy Policy Conflict of Interest Procedure Complaints and Feedback We work hard to deliver the best experience possible to our customers. We value your opinion, so if a product or service does not meet your expectations, we want to know about it. Our team is here to listen, and ready to help you resolve any complaints or concerns you may have. Plus, your feedback gives us the opportunity to better our products and services, which is something we continually strive to do. So if you have a complaint, concern, suggestion or just wish to give some feedback, please don t hesitate to get in touch. Making a Complaint When you make a complaint we will: try to resolve the matter on the spot - in most situations we can do this; keep you up to date on our progress; work hard to resolve your matter within 21 days; let you know in writing if we require more information or more time to investigate your matter; and provide you with a final response within 45 days. If we are unable to provide a final response to your complaint within 45 days, we will inform you of the reasons for the delay. However, please note that the complexity sometimes associated with traditional trustee services complaints means it may take up to 90 days for us to investigate and provide you with a final response. We will keep you updated throughout the course of our investigation. To help us get the best understanding of your concern, we recommend that you: be prepared with any supporting documents or evidence you think will help clarify your concern; and be as clear as possible about what has happened. To make a Complaint Step 1 Talk to us In most situations, we will be able to resolve the matter for you on the spot. Call us on or visit your nearest branch. If you prefer to put your complaint in writing, you can or write to us, or complete and return the Complaints, Compliments & Feedback form available at tasmanianperpetual.com.au. Phone info@tptl.com.au Mail Complaints Officer Tasmanian Perpetual Trustees GPO Box 227 HOBART TAS Guide to Estate Planning, Administration & being a Beneficiary

39 If your complaint is complex or needs a detailed investigation, we will make sure that it is referred to the right department promptly and will respond to your complaint as quickly as possible. Step 2 Ask for your complaint to be reviewed If you are not satisfied with our initial response, you can request the matter be reviewed by one of our Senior Managers. You can contact us by phone, in writing by mail or , or in person at your nearest branch. Please let us know the reason why you are not satisfied with our initial response, the outcome you are seeking and your account number if you have one. We will make sure that it is referred straight away to an appropriate Senior Manager for review and a response. Step 3 External review If, despite everyone s best efforts you remain dissatisfied with our Senior Manager s response, you may wish to have the matter investigated by someone else. The Financial Ombudsman Service (FOS) offers a free independent dispute resolution service for the Australian banking, insurance and investment industries. You can contact the FOS by: Phone Fax Post GPO Box 3 Melbourne VIC info@fos.org.au Web For information regarding complaints about your privacy refer to our Privacy Policy available at tasmanianperpetual.com.au, by calling us on or dropping into your nearest branch. 38

40 Glossary Agent Attorney Beneficiary Bequest Estate Executor Intestate Joint tenancy Legacy Life tenant Probate Residuary beneficiary Residue Testamentary trusts Testator Will Willmaker A person or organisation who is authorised to act on behalf of another person (Principal) and whose actions the Principal is then bound by A person or organisation who is authorised to act by Power of Attorney A person who benefits under a Will or Trust A gift of property under a Will, also known as a legacy The assets and liabilities of a person A person or organisation entrusted by the Willmaker to carry out the provisions of their Will A person that dies without leaving a valid Will The ownership of property by several persons, where on the death of each joint owner, the property passes to the survivors or sole survivor A gift of property under a Will, also known as a bequest A beneficiary whose benefit in property is limited to his or her lifetime The authority of the Supreme Court of Tasmania that a deceased persons Will is their last valid Will entitling the named Executor/s to administer the estate accordingly The class of beneficiaries who share the remainder of the estate after all debts, expenses, legacies and bequests are paid or distributed The portion of the Estate that remains after all debts, expenses, legacies and bequests are paid or distributed Any Trust established under a Will. Often used to split income for tax purposes or to protect vulnerable beneficiaries A person making a Will (Willmaker) A document providing for distribution of a persons estate on death A person who makes a Will (Testator) 39 Guide to Estate Planning, Administration & being a Beneficiary

41 Important Estate Planning information Location of important documents (e.g. Title deeds, life policies, capital gains and taxation records, Will, POA) Contact details of key people (e.g. accountant, solicitor, Trustee etc)

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