Inheritance & Estates

Jenny and Bruce have just received an inheritance of $80,000 in shares and $120,000 in cash from Jenny's father's deceased estate.

They have two children and own their own home with a mortgage of $150,000. Jenny earns $80,000p.a. as a pharmacist and Bruce works as a vet earning $75,000p.a.

Jenny does not have any interest in the share market, and her bank has suggested she sell the shares and invest $200,000 in term deposits at the bank.

Some factors Jenny should consider:

• The taxation implications on selling the shares.
• Tax treatment of interest income versus dividend income.
• The advantages of repaying the mortgage early.
• Borrowing to invest in the name of the highest tax payer.
• Family law implications on marital assets.

In this case we would suggest to Jenny and Bruce a number of options to enhance their own joint wealth position and preserve the purchasing power of the inheritance.

John & Jill's son Greg has remarried, he has no children with his new wife and Greg's two young children primarily reside with his former wife.

Concerns to be addressed are:

• How can John & Jill ensure that part of their estate will be used to help educate Greg's children?
• What would happen if Greg dies before they do?
• In that case who would receive their estate proceeds?
• What happens if Greg and his new wife eventually do have children of their own?
• Greg's Will has not been changed since he remarried despite many reminders. What impact does this have on John & Jill's wishes?