Australian Unity general manager for life and superannuation, Matt Walsh, said in a statement solutions such as investment bonds are a much simpler and better approach to estate planning.
“A major benefit of investment bonds is that they can be taken out in the name of the benefactor with ownership being passed to a child on their death or when the child reaches a nominated age,” Mr Walsh said.
“They also have the benefit that they cannot be overruled by any subsequent challenges to a will.”
Mr Walsh said challenges to wills are a major concern for older Australians.
However, he further added that, once an investment bond is set up, it’s a “fait accompli”.
“In addition to offering a great deal of flexibility in estate planning, it offers tax advantages for the beneficiary,” Mr Walsh said.
“For the child, it’s a very tax effective way to be given capital that they cannot access until they are older, which is accumulating returns without the high rate of tax coming into play on earnings within the bond, or affecting their personal tax when they start work.
“Additional contributions can also be made year by year on behalf of the beneficiary if an ongoing plan is set up.”
“…………… are a much simpler and better approach to estate planning”- simpler and better than what? I’m sure Mr Walsh’s product presentation was well meant but it’s, as a basic example, why our industry struggles for a real professional tag. One product is hardly a simpler and better approach. The value of the adviser is their strategic advice in estate planning. Good estate planning, is most often a multi-pronged, monitored plan where the adviser doesn’t rely on one product or in deed in some cases may have no product recommendation. We are about advice.