Latest / Beyond Sovereignty / #050 -How To Avoid Inheritance Tax In Australia

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#050 -How To Avoid Inheritance Tax In Australia · Beyond Sovereignty

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  Australia doesn't have an inheritance tax, but your kids
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  will pay one. Capital gains when they sell the investment properties, and
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  up to 17% on your super that you leave them.
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  Most people believe that a goodwill is what protects everything
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  that they leave behind, but the reality is a will decides who
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  gets it, not what it costs them, And there
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  are three things you need to understand about building a
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  legacy that will outlive you. Over the past 20 years,
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  I've helped hundreds of entrepreneurs set up and run not-for-profit structures
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  legally and compliantly. So in this episode,
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  I'm going to be stepping you through what your kids actually pay,
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  why a will can't fix it, and the structure that
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  keeps going after you, after them, and beyond, including
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  what your family can and can't do with it. You
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  want to know why I think my inheritance reel actually hits
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  such a nerve for people? I believe it's because people want
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  to know that their life mattered, that
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  it meant something. You see, when you
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  have been working your whole life and built everything that
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  you've built, you want to know that it's going to go on
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  to your children or people that you know, love and trust, and
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  that it's not going to be taken by the government. Because when
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  it's taken by the government, it doesn't mean anything. right? Nobody
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  gets to enjoy it. Nobody gets to remember you. It
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  just gets sucked away like your taxes into the abyss of
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  nothing. Whereas when you actually
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  get to create something amazing and pass it on
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  to your children and your children or your great-grandchildren or
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  people that you know, love and trust, get to absorb
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  and bask in the brilliance of the life that you helped them
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  create. It's sort of why we came to earth, isn't
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  it? It's so beautiful that we are actually able to
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  do that. So that's why I believe that the inheritance tax
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  reel is hitting nerves for people. And
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  if Australia doesn't have an inheritance tax, What
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  are families actually paying? Because we don't have something called inheritance
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  tax, we have probate. Now, probate is
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  a really great way for the government to take what
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  would be inherited from our parents and
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  take anywhere from, what, 30% are
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  beyond that, away from that inheritance. I
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  know this firsthand because both of my parents have passed away and
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  I have seen what could have been avoided, but
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  then with family members that
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  are lawyers and scientists, what got given to
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  the government because they wanted to. Now,
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  when you're in the not-for-profit space and you have other
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  entities set up, the directors change on
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  the entities. So it doesn't have to
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  be going through probate because the entity still exists, right?
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  But if you want to, like my family did, you can put it through probate
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  because the government will love to take your money. Okay, so if you want to do that, you're
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  very, very welcome. Now, what happens when the kids sell your
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  investment properties that they have inherited? It means that
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  they have taxes to pay, right?
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  So when they are selling the property, there
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  is going to be tax implications. It's going to create a taxable event. And
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  those taxable events need to be paid for. So that
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  is going to be a thing. Now, why does super catch
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  so many families out? The reason that super catches so many families out
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  is because it's going to be taxed. Right? And
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  people are putting their money aside for their children or for the
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  end periods of their lives because they think that they're going to
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  get all of that money back. I don't know. I feel like it's a really dodgy scam.
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  Does anybody else feel like that? I'm sure you probably do. Like look at
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  all of like so many states in America and Greece, all these other
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  countries that literally had people's life savings taken
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  away from them because the government felt like it. You don't own your
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  super. You don't own it. Where is it kept? Where does the
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  investments go for it? Like, I actually studied,
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  for a period of time, I actually studied financial investing, right, to see
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  what financial investors actually study. It
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  wasn't a lot. It definitely was not a lot.
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  I thought it was going to be a whole lot more, but I was able to
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  see when they are investing people's funds, super, self-managed
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  super funds, what they were actually doing. and how
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  simple it is for us to do it ourselves. So why
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  would we put extra in super when you are paying
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  somebody for financial services and like let's say
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  you're getting 10% return on investment every year, when you're working with
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  somebody they'll generally give you 4% and they'll take the rest. It's literally set
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  up on the website like that when you go in. It's like are you a financial investor or
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  are you a solo person? If you're a solo person, then
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  you get all of your investment back. If you're a financial advisor, then
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  the financial advisor takes some of your cash as well as a super fund. Why?
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  Why would you do that? It is ludicrously. No, definitely.
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  Okay. You do you boo, but seriously, if
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  we have the choice of where we're putting our funds, then
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  keep them clean, keep them secure. You want to keep them as protected as
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  possible. So super for me personally is
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  not where I would be putting my money. It is not a great strategy
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  for savings. Now what does a will do and
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  what doesn't it do? A will can be amazing
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  if everybody in your family gets along and and
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  they're okay to sell entities and assets and
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  pay the taxes on all of that and lose some of it
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  to probate, generally 30%. So a will is
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  amazing to, like with specific items
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  that you want to be divvied up through your family. That's great.
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  That's awesome. Definitely have a will for that. What it doesn't
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  do is really protect your assets as much
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  as you would desire. So let's say the
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  difference between a will and having everything set up in a not-for-profit structure, you've
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  got your directors all in there and who
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  is going to be your successors and how it's going to run. So it's all already in
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  there. But it's also great to have those directors written into your
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  will as well. So then it's like a backup. So wills are great.
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  I don't think to not have a will. I don't think that at all. However,
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  it's this and that. It's not one or the other. It's like
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  this and that. Now, what does it mean when a
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  structure actually outlives you? Now, people are like, oh, I've got
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  a trust. Well, lovely. That's amazing. I do
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  too. So did my family. But how long do trusts actually last?
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  Are they multi-generationally? And people are like, yes, they are. Well,
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  are they more than three generations? No, they're not. So, what
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  outliving, a structure that can outlive you actually is, is something
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  that can be held in perpetuity, right, which is
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  a not-for-profit. Perpetuity means it's held forever. It
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  outlives all the generations. That's why these
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  structures are so great, because they're the only things
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  that can be held in perpetuity. I want that. I want to know that if I'm
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  purchasing a rainforest so that I can reforest it, that
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  it's going to be in perpetuity so that in
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  10 generations, there is an amazing lush rainforest
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  It's very important. The projects that we have going on,
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  they're going to outlive us. So they need to be structures
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  that are going to be held in perpetuity, no matter what it is that you are doing. Don't you
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  think? Now, what can your family do with it after
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  you're gone? Oh my God! can do anything because
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  anything can be changed. So, let's say you've got your not-for-profit and
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  it's to do, you've got an animal sanctuary, but then your child
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  is into motocross riding, right? He rides motocross.
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  He wants to create an education program for teenagers to
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  be able to learn how to do motocross and become epic
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  legends. Well, he can do that. He can change the
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  entity completely because that's what these
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  entities are there for. They're able to be changed. But
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  put it this way, if you're structuring your entity at the
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  start, it could be around health, education, the environment, culture,
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  social impact, and social welfare. So that in itself can
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  already have motocross riding education, and
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  you can have your animal sanctuary, and you could have cultural
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  events, and you could also have education and
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  create your own school. Like the one entity can do multiple things.
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  That's why it's so yummy and great because you probably wouldn't
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  even need to change it for your kids to take over. How awesome is that?
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  Or you wouldn't even need to change it for your kids to join you and
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  for them to run their own projects through your not-for-profit and
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  you all do amazing things. How cool is that? Like it
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  is so cool. How am I thinking about this for
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  my own family? I'm glad you asked because my dog, Honey,
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  yes, unfortunately I'm going to outlive her. So I do
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  wonder about this. That's why I just want to know that my entities
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  are going to be held in perpetuity and I have a series of
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  adopted nieces and nephews and I
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  consider which one of them will join my entities or
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  will be passed, my entities will be passed on to. But also, I'm
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  a raw vegan, so I feel like I'm going to outlive most of them anyway. To
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  be honest, I feel like I'm going to live till I'm 250. So, I
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  just want to make sure that my entities are set up in perpetuity and they are going to have
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  successes that are going to drive the mission. I don't necessarily know
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  if that, it's definitely not going to be my family. My family just don't care about
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  the stuff that I'm into. But it will potentially be my
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  nieces and nephews' children, because they'll probably be here longer
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  than me. Sorry, nieces and nephews, I'm going to outlive you. So
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  that's what I'm thinking. But for my clients, they don't
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  have the same crazy thoughts or views as
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  me, and most of them have children. So we write their children into their
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  organizations. so that their children can be their successors. Or
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  if they've got adult children, generally their children join them in the
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  entities so that they can also run these amazing not-for-profit
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  projects that they want to get out there in the world. Because I'm telling
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  you, most people are good-hearted people that have a
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  mission on their heart, that want to do more things. And once you start to
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  get funding in from other entities such as the government or
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  corporations because they want to pay for your vision and
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  your mission and your dreams, life becomes so different, your
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  life will never be the same again. You will be
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  excited about the possibilities of what you
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  can create and it becomes addictive of all the people that
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  you can help and all of the cool projects that you can do. It's like it's
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  very addictive, let me tell you, in the best possible way because it means that
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  you can help more people and I know that that's what you're here for. Now, what's
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  the conversation I'd want every parent to have with
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  their children this week? The real conversation that I would want to have is
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  multi-parts. But the first thing is, if you are in service
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  to other people and you have a mission on your heart, you
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  will never have to pay tax. That's the conversation I wish every parent
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  was having with their children this week. Isn't that cool? What
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  do you mean? Yeah, so you don't have to pay tax if you help people and
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  if you live your purpose. Oh my God, it's what everybody
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  wants to do anyway. Interesting, isn't it? Because that's the
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  one distraction that the government keeps on putting out there. So,
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  literally having that conversation will change your children's
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  trajectory of their entire mental programming for their
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  entire life. Be in service, never have to pay tax, and live your
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  best life ever. Lit. So I hope that this
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  has really helped you with generational wealth and thinking about what
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  it is that you want to create and leave your legacy, all of it.
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  And if you want to dive in deeper, then there is some freebies for
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  you. We have got PDFs and a webinar that will help you dive in
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  deeper. It will share so much valuable information to help
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  you unprogram your mind and be able to see what
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  the government and organizations legally are doing
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  in our country. So please jump on the freebies, get
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  them. They are literally there for you. And from the bottom of my heart,
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  thank you so much for joining me today. I love
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  doing these podcasts. I love being able to connect with you guys and
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  it means the world to me to be able to share time with you and
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  be able to support you in changing the world, changing your
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  family, changing your life and living your best life ever. So thank you so