Wealth Protection

So prepare yourself and have a good think about the following questions:

If you couldn’t make a medical or financial decision, who makes the decision for you?

So you’re thinking about life insurance, how do you know it will end up in the right hands?

If you have children, who would look after them in the event of your death?

In the event of your death, do you think it would be reasonable to assume your partner might find someone else?

If the answers yes, how are you protecting your wealth from ending up in the hands of someone you’ve never met?

Most importantly, how do you make sure your children are the beneficiaries of your wealth after your surviving spouse passes?

Remember that with wealth comes greed and the person your spouse may enter into a relationship with after your passing, may not share the same love for your children or loved ones as you do!

RSM Financial have the solutions to solve all of these problems. So here’s a question worth considering:

A normal will, power of attorney OR estate plan will cost you $400-$600.

Would you be prepared to seek advice on a solution that would cost $1,500 + to help your estate save thousands, if not millions?

The difference in cost in most cases is only $1,600.00 but this depends on your individual situation and objectives

So you’ve been blessed with a child or a family and all the ups and downs that come with this life changing experience.
Their innocence and reliance on their parents in unparalleled. Their reliance on you does not change for years to come, in some cases it lasts a lifetime!

So ask yourself, why would their reliance on you change in the event of your disablement or death?

The answer, it doesn’t!

In actually fact their reliance increases, because without that loving parent, the job of raising that child becomes significantly more difficult. For both the child and the surviving parent or family member tasked with this life changing event.

Everyone knows this situation would be extremely difficult, so this shouldn’t come as a surprise. What might come as a shock is the process involved and the people that may be appointed for medical, financial and care taking needs of your child. The shock doesn’t stop there, most people are unaware of a fact that will impact every child or minor when bequeathed a legacy. 

So here are the facts when a child under the age of 18 receives an inheritance.
When a child under the age of 18 earns an income from monies paid from your estate, this income is taxed differently compared to adults. Remember, the tax applies to the income earnt, not the original capital bequested to your child.

Income tax rates for minors:

Income between
• $0.00 - $416, tax rate 0 %
• 416.00 - $1,307.00, tax rate of 66%
• $1,307.00 plus, tax rate of 47%.
In short, if your estate was to earn $30,000.00 per annum and pay these distributions to your child to look after their general well being.
• The tax payable would equate to $14,073.71
• Net income = $15,927.00
An adult above the age of 18 would pay:
• $2,280.00 for the exact same income.
• Net Income = $27,720.00

We have not included any other medicare or government levys in this calculation.

The next section covers off on insurance and what is appropriate to your families needs when deciding on a cover amount. What you may not realise is that most advisers calculations will take into account the capital bequested to child earning an income.
Why is this important?
Because the cover amount they recommended will be reduced by the earnings expected to be earnt from that capital. If these earnings are then taxed a 47% because you have not sought the right solution, your children most likely will be faced with financial hardship!
So please, seek advice as there is a simple solution to make sure that the protection you put in place ends up in your childs hands and not the governments.