Latest / The Money Puzzle / Death, taxes, and the inevitability of an inheritance tax

Transcript

Death, taxes, and the inevitability of an inheritance tax · The Money Puzzle

• 0:09
  Speaker 1: Welcome to The Money Puzzle. I'm Julianne Sprague, Wealth Editor
• 0:13
  Speaker 1: at The Australian. I'm filling in for James Kirby today,
• 0:16
  Speaker 1: and we're going to bring you a conversation about death
• 0:19
  Speaker 1: and taxes. That's right, two things that are never more
• 0:23
  Speaker 1: certain in life. The government has created enormous controversy in
• 0:27
  Speaker 1: the budget. It did contain a death tax. They rather
• 0:32
  Speaker 1: swiftly walked back from that, but in doing so, they
• 0:34
  Speaker 1: have made it so that millions of Australians will need
• 0:37
  Speaker 1: to rewrite their will. But is an inheritance tax inevitable? Well,
• 0:41
  Speaker 1: my guest today thinks that it is. Morgan Solomon is
• 0:46
  Speaker 1: a leading succession lawyer. For more than 25 years, he's
• 0:49
  Speaker 1: helped people navigate wills and estate planning, inheritance issues, say
• 0:53
  Speaker 1: that again. For more than 25 years, he's helped people
• 0:56
  Speaker 1: navigate wills and estate planning, inheritance issues, and business succession.
• 1:01
  Speaker 1: Morgan comes from a long line of lawyers spanning several generations,
• 1:05
  Speaker 1: but Interestingly enough, he did complete a fine arts degree
• 1:09
  Speaker 1: before realizing the law was really where he should be. Now,
• 1:12
  Speaker 1: he's helping people structure their affairs that can help avoid
• 1:15
  Speaker 1: costly and emotionally taxing fights over estates. And while the
• 1:20
  Speaker 1: backlash to the death tax was swift and fierce, Morgan
• 1:23
  Speaker 1: believes that some form of inheritance tax isn't just a possibility,
• 1:27
  Speaker 1: it is inevitable. And so we'll explore that in this episode. Morgan,
• 1:31
  Speaker 1: thank you very much for joining us on The Money Puzzle.
• 1:33
  Speaker 2: Oh, Julianne, good to be with you.
• 1:35
  Speaker 1: Hey, before we get into this inheritance tax and all
• 1:38
  Speaker 1: the ins and outs of the budget, I did mention
• 1:41
  Speaker 1: there that you went off the rails a little bit.
• 1:42
  Speaker 1: You had a long line of legal pedigree in your
• 1:45
  Speaker 1: family and you went off and did a fine arts degree.
• 1:47
  Speaker 1: How did your parents handle that one when you said
• 1:49
  Speaker 1: you wanted to do that?
• 1:51
  Speaker 2: My father was a lawyer. His father was a lawyer.
• 1:53
  Speaker 2: All my uncles are lawyers. All my cousins are lawyers.
• 1:55
  Speaker 2: Everyone's married lawyers. It's actually probably a disease in the
• 1:59
  Speaker 2: family that we can't escape. But The long and the
• 2:02
  Speaker 2: short of it is the last year of school, it
• 2:03
  Speaker 2: was assumed I'd go to law school. And my father
• 2:05
  Speaker 2: said at the last minute, oh, Morgan, don't do it.
• 2:08
  Speaker 2: Follow your heart. Study art, which was my first love.
• 2:12
  Speaker 2: And I did. But I'm not a very good artist, Julianne.
• 2:15
  Speaker 2: I'm not very good at it. And realize that my
• 2:17
  Speaker 2: talents actually lay elsewhere at the end of the day.
• 2:20
  Speaker 2: But I did love studying art, but ultimately couldn't avoid
• 2:24
  Speaker 2: the pull of the law.
• 2:26
  Speaker 1: Is there anything from that art degree that you use
• 2:29
  Speaker 1: every day? in your legal profession?
• 2:32
  Speaker 2: That's a really good question. I truly believe that at
• 2:36
  Speaker 2: the heart of the work that we do, especially in
• 2:39
  Speaker 2: this complicated inheritance space, that it's very creative. The structures
• 2:45
  Speaker 2: that we create, the methods by which we implement clients'
• 2:50
  Speaker 2: deepest desires for passage of their assets and looking after
• 2:53
  Speaker 2: the beneficiaries actually takes a creative lens and So there
• 2:58
  Speaker 2: is an artistic element to it. It's not just a
• 3:01
  Speaker 2: cut and paste sort of stuff.
• 3:03
  Speaker 1: Well, the Treasurer, the Prime Minister, they're on a mission, really,
• 3:06
  Speaker 1: to maybe stop some creative practices. There's a wealth tax crackdown.
• 3:11
  Speaker 1: And amongst all of that, they're putting in place a
• 3:13
  Speaker 1: minimum 30% tax on family trusts. And as I mentioned,
• 3:18
  Speaker 1: there was a death tax lurking in all of that
• 3:20
  Speaker 1: because a 30% tax was lying within testamentary trusts they've
• 3:25
  Speaker 1: now said that they're not going to do that but
• 3:27
  Speaker 1: in doing so they've structured the legislation so that if
• 3:31
  Speaker 1: there are non-exempt beneficiaries so family trusts corporations a whole
• 3:35
  Speaker 1: list of other things if that's sitting in your testamentary
• 3:38
  Speaker 1: trust you will fall foul of that tax your beneficiaries
• 3:42
  Speaker 1: will be hit with a minimum 30 tax is it
• 3:45
  Speaker 1: fair morgan and do people have to rewrite their wills
• 3:48
  Speaker 1: if they've got a testamentary trust.
• 3:51
  Speaker 2: Two things in that. First, is it fair? No, I
• 3:55
  Speaker 2: don't think it is. Not for testamentary trusts in particular.
• 3:58
  Speaker 2: They have a very unique position in society. I think
• 4:03
  Speaker 2: that whilst they look analogous to a family trust, and
• 4:08
  Speaker 2: in many ways they work in an identical way, their
• 4:12
  Speaker 2: fundamental purpose is very different. The whole purpose of a
• 4:16
  Speaker 2: testamentary trust is to make provision for family, especially needy families.
• 4:20
  Speaker 2: needy beneficiaries, children, minor children, elderly people, children with vulnerable
• 4:27
  Speaker 2: risk factors, a whole host of reasons why the testamentary
• 4:30
  Speaker 2: trust is such an important thing. So when the structure
• 4:35
  Speaker 2: of the trust changes to reduce who the potential beneficiaries
• 4:39
  Speaker 2: can be by taking out corporations and other trusts, it
• 4:44
  Speaker 2: reduces its effectiveness for that purpose. I know that the
• 4:48
  Speaker 2: government is very focused on the tax aspect to it
• 4:52
  Speaker 2: and that there are claims that these are used as
• 4:55
  Speaker 2: ways to minimize tax. But in my experience, that's a
• 4:59
  Speaker 2: side issue to a testamentary trust. The testamentary trust has
• 5:03
  Speaker 2: always had as its primary focus this question of protection
• 5:08
  Speaker 2: and a control over assets. Drip feeding money out to
• 5:13
  Speaker 2: beneficiaries at a certain time, preserving it until they're of
• 5:16
  Speaker 2: a certain age that they can actually deal with it properly.
• 5:20
  Speaker 2: Making sure that it's preserved not just for generation one,
• 5:23
  Speaker 2: but two and three and four. It takes an outsized position,
• 5:26
  Speaker 2: for example, with blended families, which are one of the
• 5:31
  Speaker 2: most complicated ways we have to deal with estates now.
• 5:34
  Speaker 1: The way you're explaining that means that these are quite
• 5:37
  Speaker 1: broad instruments. They are, for all intents and purposes, if
• 5:41
  Speaker 1: you go to see a lawyer to structure your will,
• 5:43
  Speaker 1: it will likely have a testamentary trust in there. And
• 5:46
  Speaker 1: it's not necessarily the domain of the very rich and famous,
• 5:49
  Speaker 1: shall we say. The treasurer seems to think it's some
• 5:51
  Speaker 1: mechanism for tax evasion.
• 5:53
  Speaker 2: Yeah, that is one of the myths of testamentary trusts,
• 5:58
  Speaker 2: that these are fat cat instruments used only by the
• 6:02
  Speaker 2: ultra rich. They're really not. They are an absolutely standard
• 6:06
  Speaker 2: mechanism now for families at every level, even relatively modest assets.
• 6:12
  Speaker 2: The idea of holding assets in a testamentary trust is
• 6:15
  Speaker 2: a critical component of modern estate planning. It wasn't 20, 30,
• 6:21
  Speaker 2: 40 years ago, but it is now. And our landscape,
• 6:25
  Speaker 2: our social landscape is now so complicated, not just the
• 6:30
  Speaker 2: manner in which we own assets and our financial structures,
• 6:34
  Speaker 2: But our family dynamics are more complicated. I mentioned a
• 6:37
  Speaker 2: second ago the blended family, the second spouse, the third spouse,
• 6:41
  Speaker 2: the de facto spouses, the biological children from one marriage,
• 6:45
  Speaker 2: the stepchildren from another. Balancing those is a very nuanced
• 6:52
  Speaker 2: piece of work because, of course, it's unique to every
• 6:56
  Speaker 2: family and they all have different rationales. But at its
• 6:59
  Speaker 2: heart is the use of testamentary trusts. to preserve assets
• 7:03
  Speaker 2: for someone to use, but not really own. And then
• 7:07
  Speaker 2: we see it pass to the next generation, for example.
• 7:10
  Speaker 1: So what's your advice to your clients at the moment?
• 7:14
  Speaker 1: Do they need to do a new will?
• 7:16
  Speaker 2: Good question. I'm going to give you a loyally answer.
• 7:19
  Speaker 2: It depends. There is so much potential for revisit, revisitation
• 7:29
  Speaker 2: of wills in an environment where there's these changes. But
• 7:32
  Speaker 2: it doesn't automatically mean that a will that you have
• 7:35
  Speaker 2: now is not valid or needs instant change, but it might.
• 7:42
  Speaker 2: The thing is, if we now go in and revisit
• 7:46
  Speaker 2: every single testamentary trust that we've drafted in the last
• 7:50
  Speaker 2: 25 years to strip out the beneficiaries who are other
• 7:55
  Speaker 2: trusts and corporations, for example, the ones that are found
• 7:58
  Speaker 2: to be offensive to the prospect of provision for family,
• 8:02
  Speaker 2: It's an impossibility, right? It's not actually possible to go
• 8:06
  Speaker 2: and vary every single will that's been done in that way.
• 8:09
  Speaker 2: So there will be people that are caught out by this.
• 8:13
  Speaker 2: My only piece of advice to clients would be pull
• 8:17
  Speaker 2: the will out of the bottom drawer, have a read
• 8:20
  Speaker 2: and ask yourself, is there anything in there which is
• 8:23
  Speaker 2: old hat or new? Do I need to have a
• 8:27
  Speaker 2: bit of a think around where my assets are going? That,
• 8:30
  Speaker 2: by the way, is useful for everyone with a will
• 8:32
  Speaker 2: which is more than five years old. Definitely a will
• 8:35
  Speaker 2: more than 10 years old. At that point, they're out
• 8:38
  Speaker 2: of currency for sure.
• 8:40
  Speaker 1: I would say writing a will might be like painting
• 8:44
  Speaker 1: your house. You know it needs to sort of be
• 8:45
  Speaker 1: done and maybe updated from time to time, but it's
• 8:48
  Speaker 1: not something you really turn your mind to. You've got
• 8:49
  Speaker 1: better things to do on the weekend, Morgan. When do
• 8:53
  Speaker 1: most people typically get a will? Is there an average
• 8:55
  Speaker 1: age that you see where people finally think, oh, better
• 8:58
  Speaker 1: get one of those?
• 8:59
  Speaker 2: It's not so much an average age, Julianne, as a
• 9:03
  Speaker 2: trigger moment in people's lives, which happens at different points.
• 9:07
  Speaker 2: One of the significant triggers is a lasting partnership, relationship,
• 9:14
  Speaker 2: de facto spouse or marriage. That's generally one of the
• 9:17
  Speaker 2: first things that makes people sit down and go, oh, gosh,
• 9:20
  Speaker 2: I probably should think a little bit further about my life.
• 9:23
  Speaker 2: The other one is having children. Massive change that's suddenly happening.
• 9:28
  Speaker 2: reorganizes people's brains to think about things outside themselves and
• 9:33
  Speaker 2: therefore what I might do for my other loved ones.
• 9:36
  Speaker 2: But the one that keeps coming back time and time
• 9:38
  Speaker 2: again is people that see the material effect of death
• 9:44
  Speaker 2: and how it plays out in real life when they
• 9:46
  Speaker 2: experience it in their own family. Death of a sibling,
• 9:49
  Speaker 2: death of a parent in particular, Most people suddenly realize, gosh,
• 9:54
  Speaker 2: this stuff's pretty complicated. I should get my affairs in
• 9:58
  Speaker 2: order because I don't want to have the nightmare that
• 10:00
  Speaker 2: I've just gone through dealing with probate for a difficult
• 10:03
  Speaker 2: or old will.
• 10:04
  Speaker 1: Indeed. It's a lot of paperwork that goes on. So Morgan,
• 10:07
  Speaker 1: with that in mind, what happens if you don't have
• 10:12
  Speaker 1: a will? Asking for a friend, potentially me, that kind
• 10:17
  Speaker 1: of city of covering this issue for the Australian a
• 10:19
  Speaker 1: lot and I'm thinking to myself oh wow I probably
• 10:22
  Speaker 1: need to get my affairs in order so what would
• 10:24
  Speaker 1: happen should the worst happened to myself.
• 10:26
  Speaker 2: First of all I'm not going to judge or chastise
• 10:29
  Speaker 2: you because you are in about the 40 percent of
• 10:34
  Speaker 2: adult Australians that will not have one and that's a
• 10:38
  Speaker 2: pretty large number right because at its essence When you
• 10:44
  Speaker 2: die without a will, you are known as intestate. And
• 10:47
  Speaker 2: your estate, that's all the assets that you own, are
• 10:50
  Speaker 2: carved up according to a formula. And that formula is
• 10:54
  Speaker 2: set down in a piece of law. Now this formula
• 10:57
  Speaker 2: is slightly different from state to state in Australia, but
• 11:00
  Speaker 2: it's broadly very similar. It says we're going to carve
• 11:04
  Speaker 2: up everything you own amongst certain family members left behind.
• 11:08
  Speaker 2: Spouses will get a certain portion. Children will get another portion.
• 11:12
  Speaker 2: Brothers and sisters, parents may get a portion depending on
• 11:16
  Speaker 2: who you've got in your orbit. If you don't leave
• 11:19
  Speaker 2: a spouse or children or brothers or sisters, it'll go
• 11:22
  Speaker 2: down to uncles and aunts, nieces and nephews and very
• 11:25
  Speaker 2: distant relatives, which is where those classic stories come out
• 11:29
  Speaker 2: of people getting a knock on the door saying your
• 11:32
  Speaker 2: great uncle has just died in Scotland and you're the
• 11:35
  Speaker 2: beneficiary of a multi-million pound estate. These things do happen
• 11:40
  Speaker 2: because the bloodline has to be found. Without a will,
• 11:45
  Speaker 2: you simply have no say. You have no direction, and
• 11:48
  Speaker 2: it is a fixed formula. Often that works out okay.
• 11:54
  Speaker 2: I've never seen it work out well, but I've seen
• 11:56
  Speaker 2: it work out okay. The worst cases are where you
• 11:59
  Speaker 2: have a spouse and children, and the children are under
• 12:02
  Speaker 2: 18 because they will pick up a share, but of
• 12:04
  Speaker 2: course they can't own a share until they reach adulthood.
• 12:08
  Speaker 2: So their share has to be held on trust, and
• 12:10
  Speaker 2: then there's the next question, who's the trustee? What are
• 12:12
  Speaker 2: the terms of the trust? The court is materially involved
• 12:17
  Speaker 2: in these questions and it is elaborate work, complicated work, expensive,
• 12:24
  Speaker 2: and also throws up strangers suddenly coming in to handle
• 12:28
  Speaker 2: family money. It's just a disaster. Intestacy is a disaster.
• 12:33
  Speaker 2: Don't die without a will.
• 12:35
  Speaker 1: End of lecture. If people are listening now, if you
• 12:38
  Speaker 1: could see my face, it is very contorted now. I
• 12:41
  Speaker 1: feel a little bit sick in the stomach. And if
• 12:42
  Speaker 1: that wasn't a kick in the backside, I don't know
• 12:44
  Speaker 1: what was. So maybe next time we chat more, I'll
• 12:47
  Speaker 1: be like, I actually.
• 12:48
  Speaker 2: This intestacy thing fascinates me, Julianne, because it just goes on.
• 12:52
  Speaker 2: The number of about a third of Australians broadly nationwide
• 12:55
  Speaker 2: who die without a will has been current for the
• 12:59
  Speaker 2: entirety of my career. So at least the last quarter
• 13:01
  Speaker 2: of a century, that number's been current. In the last
• 13:04
  Speaker 2: few years, it's risen up slightly. And I think it's
• 13:07
  Speaker 2: risen up slightly... by the millennials who are not taking
• 13:12
  Speaker 2: this very seriously at all. But it's a number that
• 13:16
  Speaker 2: has remained constant enough for me to see it every
• 13:19
  Speaker 2: week in my practice.
• 13:21
  Speaker 1: Okay. I feel like there's a national campaign coming on
• 13:25
  Speaker 1: more than maybe I can talk to the editors at
• 13:27
  Speaker 1: The Australian and see what we can do. In a moment,
• 13:30
  Speaker 1: we'll have a chat about this idea about an inheritance
• 13:33
  Speaker 1: tax because you firmly believe this is inevitable and we'll
• 13:36
  Speaker 1: talk about the reasons for that. And I also want
• 13:39
  Speaker 1: to talk to you about the courts. We just talked
• 13:41
  Speaker 1: about if I don't have a will, the courts get
• 13:43
  Speaker 1: heavily involved. But we also have this massive intergenerational wealth transfer.
• 13:47
  Speaker 1: And it seems to me that the size of the
• 13:49
  Speaker 1: kitty is getting big enough that lots of people want
• 13:52
  Speaker 1: to go now and fight over it. So we'll have
• 13:54
  Speaker 1: a chat about the court process, how long it might
• 13:57
  Speaker 1: take as people contest wills and whether you're seeing more
• 14:00
  Speaker 1: of that. We'll have that discussion when we come back
• 14:02
  Speaker 1: from the break. Welcome back to The Money Puzzle. I'm
• 14:20
  Speaker 1: Julianne Sprague, Wealth Editor at The Australian. I'm filling in
• 14:23
  Speaker 1: for James Kirby today. We are speaking with succession and
• 14:27
  Speaker 1: estate lawyer Morgan Solomon, who has very firmly put an
• 14:35
  Speaker 1: item further up my to-do list, shall I say. That's
• 14:37
  Speaker 1: a very complicated way of saying the will needs to
• 14:40
  Speaker 1: get done and maybe that's my job for this weekend.
• 14:44
  Speaker 1: But before we went to the break, Morgan, we were
• 14:45
  Speaker 1: talking about the inheritance tax. We talked about the budget
• 14:50
  Speaker 1: and how it sort of has this death tax. It's
• 14:52
  Speaker 1: not terribly fair what's happening. But do you seem to
• 14:55
  Speaker 1: think an inheritance tax is inevitable? Why is that?
• 15:00
  Speaker 2: I do think a tax is inevitable at some point.
• 15:05
  Speaker 2: I suppose if we take a step back, we don't,
• 15:08
  Speaker 2: as we stand as a nation, have a direct inheritance tax.
• 15:12
  Speaker 2: We don't have a tax which says, you've died, now
• 15:14
  Speaker 2: we're going to take a percentage or a number. as
• 15:17
  Speaker 2: we do in, say, the UK, for example. And in that,
• 15:20
  Speaker 2: of course, Australia is really one of the last developed
• 15:23
  Speaker 2: countries in the world that does not have an inheritance tax.
• 15:26
  Speaker 2: We are an outlier. And what I'm seeing is that
• 15:32
  Speaker 2: the social demographics, the makeup of our country in terms
• 15:36
  Speaker 2: of population, is trending toward the elderly. We are aging.
• 15:44
  Speaker 2: We are living longer than humans have ever before. And
• 15:51
  Speaker 2: we will continue to do so. They are talking about, broadly,
• 15:55
  Speaker 2: my children's generation being the first that will easily experience
• 15:59
  Speaker 2: 100 years old. Easily. And a lot, lot longer. And
• 16:03
  Speaker 2: their children, perhaps, stretching much further into the future. So
• 16:08
  Speaker 2: as we age... We are, of course, not generating income
• 16:13
  Speaker 2: in the traditional sense to pay income taxes. And the
• 16:16
  Speaker 2: costs of health care and looking after the elderly are
• 16:21
  Speaker 2: growing at an exponential rate. So what we have is
• 16:24
  Speaker 2: an aging population, fewer people able to pay the taxes
• 16:29
  Speaker 2: for income tax for it, and a gap. And I
• 16:33
  Speaker 2: don't know where that gap comes from other than some
• 16:36
  Speaker 2: kind of clip of the ticket of the money that
• 16:40
  Speaker 2: will move down from one generation to the other.
• 16:42
  Speaker 1: So it's a honeypot you think politicians won't be able
• 16:45
  Speaker 1: to ignore?
• 16:45
  Speaker 2: I think it's inevitable. I think it is inevitable. And
• 16:48
  Speaker 2: the honeypot's a fair type of way to describe it.
• 16:53
  Speaker 2: The whispers have been that, well, it might be estates
• 16:56
  Speaker 2: over $ 5 million, which I've also heard some people describe
• 17:01
  Speaker 2: as ultra-rich, which is nonsense. A $ 5 million estate is.
• 17:08
  Speaker 2: Don't get me wrong, $ 5 million is $ 5 million, but
• 17:10
  Speaker 2: it's not that large anymore, especially when you take into
• 17:15
  Speaker 2: account that a significant portion of that is likely to
• 17:19
  Speaker 2: be the family home, and then the potential that it
• 17:23
  Speaker 2: needs to be carved up amongst a whole raft of beneficiaries.
• 17:26
  Speaker 2: $ 5 million to one person, that's pretty good. That should
• 17:30
  Speaker 2: see them through. $ 5 million spread around five children, each
• 17:34
  Speaker 2: of whom has their own dependent children and all of
• 17:37
  Speaker 2: whom have millions of dollars of debt, will be evaporated
• 17:40
  Speaker 2: in a New York minute. So these are not large estates.
• 17:44
  Speaker 2: I think if there is a prospect toward taxing these estates,
• 17:48
  Speaker 2: it has to be a much larger number, 10 million plus.
• 17:51
  Speaker 2: We know that there's already been moves towards superannuation to
• 17:56
  Speaker 2: reduce the number which gets away tax-free on that. And
• 18:01
  Speaker 2: I think there's a similar sense in inheritance generally. Some assets,
• 18:06
  Speaker 2: of course, should remain outside that, such as the family home.
• 18:10
  Speaker 2: But even those have little risk factors starting to attach.
• 18:15
  Speaker 1: How does it operate overseas? I know every jurisdiction will
• 18:17
  Speaker 1: have differences, but what sort of level of taxation are
• 18:21
  Speaker 1: we talking about?
• 18:22
  Speaker 2: It could be modest, actually. If you look at somewhere
• 18:25
  Speaker 2: like South Korea, it's only a couple of percent, but
• 18:29
  Speaker 2: taken across thousands and thousands of wealthy estates. is a
• 18:35
  Speaker 2: meaningful add to the coffers. I think that the model
• 18:39
  Speaker 2: that perhaps might find favor ultimately is analogous to the
• 18:45
  Speaker 2: UK model, which says that it's tax-free if it goes
• 18:50
  Speaker 2: to the surviving spouse. So the first rung of the ladder.
• 18:53
  Speaker 2: But once it then starts to travel down the next generations,
• 18:57
  Speaker 2: there's a sliding scale. And the first I think from memory,
• 19:01
  Speaker 2: I'm not a British lawyer, so I can't say with certainty,
• 19:04
  Speaker 2: but it's something like the first 350,000 pounds is tax-free.
• 19:09
  Speaker 2: And then there's a sliding scale above that slices off
• 19:13
  Speaker 2: a proportion above into the 15, 20% type range, which
• 19:18
  Speaker 2: can end up quite a lot of money. And then
• 19:20
  Speaker 2: you start to have people think about creative ways to
• 19:25
  Speaker 2: move assets around potentially to avoid these things. And you
• 19:29
  Speaker 2: come back to family trusts and do we have assets
• 19:33
  Speaker 2: in those solely to defeat inheritance tax? And well, that's
• 19:38
  Speaker 2: not going to happen either because I cannot imagine that
• 19:41
  Speaker 2: a government that was looking at this would not look
• 19:45
  Speaker 2: at what we call total wealth as opposed to estate wealth.
• 19:49
  Speaker 2: Estate wealth is what falls in the will, what we
• 19:52
  Speaker 2: own personally. Total wealth are all of those assets we
• 19:56
  Speaker 2: effectively control outside the will, including superannuation, family trusts, and
• 20:03
  Speaker 2: assets that drift further and further away from my name
• 20:07
  Speaker 2: but which nonetheless I still hold the rudder of when
• 20:11
  Speaker 2: it comes to control.
• 20:13
  Speaker 1: So if we made the assumption that an inheritance tax
• 20:16
  Speaker 1: is potentially inevitable, maybe it comes into being in a decade,
• 20:20
  Speaker 1: 15 years, with the treasurer right now, who knows, maybe
• 20:22
  Speaker 1: he goes for it next year, he's pretty bold. What
• 20:26
  Speaker 1: should people be doing with their estates? Is it a
• 20:28
  Speaker 1: way that you can prepare for that? Are we going
• 20:30
  Speaker 1: to see more sort of living inheritances as people try
• 20:33
  Speaker 1: and give it away while they're living so it doesn't,
• 20:36
  Speaker 1: what's the advice?
• 20:39
  Speaker 2: Unfortunately, there's nothing we can do in anticipation because we
• 20:43
  Speaker 2: simply have no idea what it might look like or when.
• 20:47
  Speaker 2: I don't think there's anything that we can or should
• 20:49
  Speaker 2: be doing now in light of future inheritance taxes other
• 20:54
  Speaker 2: than be incredibly watchful around what the landscape is moving
• 21:01
  Speaker 2: toward because there might be structures or methods which could
• 21:08
  Speaker 2: be employed early. One of those that I think is
• 21:12
  Speaker 2: very interesting, and you've touched on it, is the so-called
• 21:14
  Speaker 2: early inheritance, which is the passing of wealth during life,
• 21:19
  Speaker 2: not waiting until you actually die. I'm definitely having more
• 21:23
  Speaker 2: clients come to me with that in mind, looking to
• 21:26
  Speaker 2: benefit the children now rather than in another 15 years.
• 21:31
  Speaker 2: It's not done out of a fear of inheritance taxes.
• 21:36
  Speaker 2: it's done much more with a truly altruistic base to it,
• 21:41
  Speaker 2: which is I want to benefit my kids. I want
• 21:44
  Speaker 2: to see them get ahead. I want to put them
• 21:46
  Speaker 2: on the property ladder, help them buy a place, that
• 21:48
  Speaker 2: kind of thing.
• 21:50
  Speaker 1: As parents do, you want your kids to always be thriving.
• 21:52
  Speaker 1: We have one of our listeners who has sent in
• 21:55
  Speaker 1: a question about that. So I will get you to
• 21:57
  Speaker 1: respond to that in just a sec when we get
• 21:58
  Speaker 1: to the questions. But we have touched on the The
• 22:03
  Speaker 1: wealth transfers, there's this amazing amount of wealth that will
• 22:06
  Speaker 1: transfer from one generation to the next. It's worth trillions
• 22:10
  Speaker 1: of dollars. Is that going to put more pressure on
• 22:15
  Speaker 1: the courts? We're already seeing a lot more wills being
• 22:18
  Speaker 1: contested and I do wonder if it's because the size
• 22:20
  Speaker 1: of the estate means that some people who felt left
• 22:23
  Speaker 1: out of a will feel compelled to fight for it.
• 22:26
  Speaker 1: What are you saying?
• 22:28
  Speaker 2: Yeah, the great wealth transfer that you mentioned is absolutely real.
• 22:33
  Speaker 2: The number varies in terms of scale, but the last
• 22:35
  Speaker 2: number I saw was $ 5. 4 trillion, and that's just Australia.
• 22:40
  Speaker 2: And it's important to remember that number is not the
• 22:44
  Speaker 2: wealth of Australians in total. That's just the baby boomers
• 22:49
  Speaker 2: and the silent generation. That's just this small slice right
• 22:54
  Speaker 2: at the end of the scale who are moving those
• 22:58
  Speaker 2: assets down the line, and it's happening right now and
• 23:01
  Speaker 2: will continue to over the next 15 years. So it's
• 23:05
  Speaker 2: not a question of will it move? It is moving
• 23:08
  Speaker 2: and it must move. The last time I looked at this,
• 23:12
  Speaker 2: death had a 100% strike rate. We can't actually avoid it.
• 23:16
  Speaker 2: So it must move and our assets must change hands.
• 23:18
  Speaker 2: And when they do, they're either going to land well
• 23:22
  Speaker 2: or they're going to land poorly. And this feeds into
• 23:24
  Speaker 2: the next part of your question, which is the dispute side.
• 23:28
  Speaker 2: The disputes... The classics for, there's two sorts of classic
• 23:33
  Speaker 2: dispute of a will. One is about validity, which is
• 23:37
  Speaker 2: also a form of challenge that's on the rise. And again,
• 23:39
  Speaker 2: I mentioned this earlier because of our aging population. Wills
• 23:43
  Speaker 2: made by the very elderly, very shortly before death, carry
• 23:48
  Speaker 2: enormous risk that they're not legally valid because the person
• 23:52
  Speaker 2: who wrote it was not fully compass about their affairs.
• 23:56
  Speaker 2: That will be struck out. It'll be invalid. and will
• 23:59
  Speaker 2: return to what might have been a previous will, which
• 24:02
  Speaker 2: might be one from 40 years ago, for example.
• 24:05
  Speaker 1: On that point, though, is it deemed that they're too
• 24:08
  Speaker 1: old to make the will, or is it that they're
• 24:10
  Speaker 1: at a duress or something?
• 24:11
  Speaker 2: It's not that they're too old. No, it's that it
• 24:15
  Speaker 2: can be demonstrated that they didn't understand sufficiently what they
• 24:19
  Speaker 2: were doing when they made the will. It could be duress. Well,
• 24:22
  Speaker 2: the duress is actually a relatively rare thing. More often
• 24:26
  Speaker 2: what we see is pressure. which is not illegal. You
• 24:30
  Speaker 2: can stand by your elderly parent's bedside and nag them
• 24:36
  Speaker 2: until they finally go, fine, I'll write it. I'll give
• 24:39
  Speaker 2: you what you want. That's not duress. That's just condescending
• 24:44
  Speaker 2: to a childish pressure. Dress is where a person's actually
• 24:48
  Speaker 2: own sense of free will is overborne by the pressure.
• 24:53
  Speaker 2: A classic example of that is a child an adult
• 24:57
  Speaker 2: child that says to their parent, if you don't write
• 25:00
  Speaker 2: a will leaving me everything, you're never going to see
• 25:03
  Speaker 2: your grandchildren again. Kind of that, this happens, this happens.
• 25:08
  Speaker 2: And so the elderly person genuinely feels they have no alternative.
• 25:14
  Speaker 2: The cost is too high. I must do what they
• 25:16
  Speaker 2: want in order to keep the peace. Now that's duress.
• 25:20
  Speaker 2: Very hard thing to prove though, Julianne, right? Because this
• 25:23
  Speaker 2: is a question of evidence that needs to be put
• 25:25
  Speaker 2: before a judge. in the Supreme Court, very hard to prove.
• 25:29
  Speaker 2: But a will that's invalid is essentially one made by
• 25:31
  Speaker 2: a person that did not fully understand what they were
• 25:34
  Speaker 2: doing at the time. But the other form of challenge,
• 25:37
  Speaker 2: the main form of challenge, the one that is absolutely
• 25:40
  Speaker 2: clogging our courts, certainly here in Western Australia, but from
• 25:44
  Speaker 2: my colleagues across the country is no different, is what's
• 25:47
  Speaker 2: called a family provision challenge. And this is the classic,
• 25:51
  Speaker 2: I've not been left enough in the will. Dad wrote
• 25:54
  Speaker 2: a will. He left it all to my two siblings
• 25:58
  Speaker 2: and I get nothing. I want some of that prize.
• 26:02
  Speaker 2: Now that's the classic challenge. These are red hot claims.
• 26:06
  Speaker 2: They are running at a million miles an hour. Our
• 26:08
  Speaker 2: courts are absolutely consumed by them. And they are a
• 26:14
  Speaker 2: function of, on the one hand, these greater estates. The
• 26:19
  Speaker 2: size of the prize is larger. Millions of dollars at stake.
• 26:24
  Speaker 2: And it's pretty easy to ask for, well, just slide
• 26:27
  Speaker 2: off a few hundred thousand dollars and I'll walk away
• 26:30
  Speaker 2: is a very easy way to resolve these things. And
• 26:32
  Speaker 2: they often do.
• 26:33
  Speaker 1: Because how long is the court process? I'm thinking if
• 26:36
  Speaker 1: you're the sibling that hasn't got anything and the two
• 26:39
  Speaker 1: other siblings, for the sake of this exercise, have been
• 26:42
  Speaker 1: given the lion's share of the estate, is it that
• 26:44
  Speaker 1: the person who's got nothing really has nothing to lose?
• 26:46
  Speaker 1: And I don't know how many years it might take
• 26:49
  Speaker 1: to resolve it. And you just hope for some sort
• 26:51
  Speaker 1: of settlement from the other family members, is that? What's
• 26:53
  Speaker 1: going on?
• 26:54
  Speaker 2: Yeah, there's truth in that, but for the risk of
• 26:57
  Speaker 2: legal costs. Running these things can be ruinously expensive if
• 27:01
  Speaker 2: you take them all the way to trial. Hundreds of
• 27:04
  Speaker 2: thousands of dollars in legal fees for these big cases.
• 27:07
  Speaker 2: So there is risk versus reward in these. And claims,
• 27:12
  Speaker 2: not all claims are successful and not all people have
• 27:16
  Speaker 2: the basis of a claim. It's important for people to
• 27:19
  Speaker 2: know that merely being a child or even merely being
• 27:23
  Speaker 2: a spouse or a grandchild does not automatically entitle you
• 27:27
  Speaker 2: to anything. We have what's called freedom of testamentary disposition
• 27:31
  Speaker 2: in Australia. As an adult, I'm allowed to leave my stuff,
• 27:34
  Speaker 2: no matter how big or small, to whomever I want.
• 27:38
  Speaker 2: I can leave it all to a stranger in the
• 27:39
  Speaker 2: street if I want.
• 27:40
  Speaker 1: Yeah, but I think that's the key point. I think
• 27:42
  Speaker 1: most people, if they're listening to this and they've written
• 27:44
  Speaker 1: their will, want their wishes respected. So even if there's
• 27:48
  Speaker 1: a child or a spouse and they haven't allowed for it,
• 27:50
  Speaker 1: that's written in their will. It's signed. How can it
• 27:53
  Speaker 1: possibly be contested? You can understand why people would have
• 27:57
  Speaker 1: that feeling.
• 27:59
  Speaker 2: Oh, I absolutely do. But a will is not something, well,
• 28:02
  Speaker 2: let me take a step back. If you've got a second,
• 28:04
  Speaker 2: this is actually a philosophical question that goes back to
• 28:08
  Speaker 2: the nature of property and how we own property. And
• 28:11
  Speaker 2: so on the one hand, you have strong philosophical views,
• 28:16
  Speaker 2: such as John Stuart Mill, who says If you own property,
• 28:20
  Speaker 2: you own it with almost absolute right to do with
• 28:23
  Speaker 2: it as you please, and you should be able to
• 28:25
  Speaker 2: do with it as you please, and no one else
• 28:27
  Speaker 2: should have any claim on it. And on the other hand,
• 28:29
  Speaker 2: you have someone like Emmanuel Kant who says, well, yeah,
• 28:34
  Speaker 2: but we own property in a social contract. That means
• 28:37
  Speaker 2: that there are limits to what you can do with
• 28:39
  Speaker 2: your property. And we've sort of landed halfway between the two.
• 28:43
  Speaker 2: We have an absolute right to do with it as
• 28:45
  Speaker 2: we please, But if we don't meet the social contract
• 28:49
  Speaker 2: for certain family members who are dependent or have specific
• 28:52
  Speaker 2: need for it or who we have an obligation to,
• 28:55
  Speaker 2: they can seek that provision. So this is where it
• 28:58
  Speaker 2: becomes interesting. I get a lot of people that come
• 29:00
  Speaker 2: to me to say, well, Morgan, I'm one of four children.
• 29:04
  Speaker 2: Surely I should get a quarter. Isn't that the law? No,
• 29:08
  Speaker 2: that is not the law. The law is you've been
• 29:11
  Speaker 2: left out. You need to mount your claim based on
• 29:14
  Speaker 2: whether the will has made adequate and proper provision for you.
• 29:19
  Speaker 2: And that is a question of what is your financial position,
• 29:22
  Speaker 2: very largely. So if I come to a claim as
• 29:25
  Speaker 2: a multimillionaire and I don't really need much, the court's
• 29:29
  Speaker 2: going to laugh me out. If I come to the
• 29:32
  Speaker 2: claim as a pauper, manifestly dependent on the deceased and
• 29:36
  Speaker 2: in desperate need, the court is going to find me victorious.
• 29:40
  Speaker 2: So it's a very subjective analysis for everybody.
• 29:43
  Speaker 1: So we do have to get through the list of questions.
• 29:46
  Speaker 1: We're going to run out of time, but I just
• 29:47
  Speaker 1: want to round that out. If there are people listening
• 29:49
  Speaker 1: to this, you know, there's fractured families, those sorts of things.
• 29:52
  Speaker 1: If you do have a family member and perhaps part
• 29:56
  Speaker 1: of the fractured relationship is that they are on... they're
• 29:59
  Speaker 1: bare bones and a drifter can't work a hard day
• 30:02
  Speaker 1: in their life. You've heard the arguments, I'm sure, Morgan.
• 30:05
  Speaker 1: Is it still beneficial to allow for that person in
• 30:08
  Speaker 1: the estate to save the other beneficiaries having to go
• 30:11
  Speaker 1: through a messy court case?
• 30:13
  Speaker 2: 100%. And if we get right back to what we
• 30:16
  Speaker 2: were talking to at the beginning, the answer is testamentary trusts.
• 30:19
  Speaker 2: I don't leave that child a big lump of cash
• 30:22
  Speaker 2: in their hand, which I know is going to evaporate
• 30:25
  Speaker 2: or which might go into drugs or gambling or all
• 30:28
  Speaker 2: sorts of things or even actually be a burden for them,
• 30:31
  Speaker 2: I leave it in a structured manner so that it
• 30:33
  Speaker 2: can actually look after them and make sure that they
• 30:36
  Speaker 2: are not fed to the wolves but without them actually
• 30:39
  Speaker 2: owning it. The trick is in the quantification of this.
• 30:43
  Speaker 2: You leave them enough but not so much. It's, again,
• 30:47
  Speaker 2: very subjective. It varies from person to person and time
• 30:50
  Speaker 2: to time.
• 30:53
  Speaker 1: I can see why you're a busy individual at the moment, Morgan.
• 30:56
  Speaker 1: I really can. You're listening to The Money Puzzle. I'm
• 31:10
  Speaker 1: Julianne Sprague, Wealth Editor at The Australian, filling in for
• 31:13
  Speaker 1: James Kirby. We do have an email, themoneypuzzleattheaustralian.com.au. Morgan, we
• 31:20
  Speaker 1: have many listeners to this podcast. And one of the
• 31:24
  Speaker 1: fun things about it is we can take the questions
• 31:26
  Speaker 1: and put them to our experts. Just a reminder, this
• 31:30
  Speaker 1: is not financial advice. It is not legal advice. It
• 31:33
  Speaker 1: is general in nature. And if you do need advice
• 31:35
  Speaker 1: for your circumstances, we do encourage you to seek professional advice.
• 31:40
  Speaker 1: Sarah in Brisbane, she says, my husband and I are
• 31:43
  Speaker 1: considering giving our two adult children their inheritance early as
• 31:47
  Speaker 1: a property deposit. And I'm sure this isn't uncommon. There's
• 31:50
  Speaker 1: lots of people trying to help their kids get into
• 31:52
  Speaker 1: the property market. So she's saying, is a living inheritance
• 31:55
  Speaker 1: a smart way to beat a future death tax or
• 31:57
  Speaker 1: more taxes on superannuation? And what are the legal traps
• 32:01
  Speaker 1: we need to look out for if we do this?
• 32:04
  Speaker 2: Well, excellent question, Sarah. And I'm going to predicate this
• 32:07
  Speaker 2: by saying that this isn't specifically legal advice, but I'm
• 32:11
  Speaker 2: going to address your question in a very pointed way,
• 32:14
  Speaker 2: which is to say, I don't think the inheritance tax
• 32:18
  Speaker 2: thing is the bit to worry about for you, but
• 32:20
  Speaker 2: there are things to worry about. And there's two things.
• 32:24
  Speaker 2: The first is this. I've had a number of clients
• 32:26
  Speaker 2: who have made very substantial early inheritances to adult children
• 32:31
  Speaker 2: without really crunching the numbers at their own end and
• 32:35
  Speaker 2: then realizing that maybe they've given away just a bit
• 32:38
  Speaker 2: too much because they hadn't thought that they would live
• 32:40
  Speaker 2: for another 25 years and realize that actually they're going
• 32:44
  Speaker 2: to need more in retirement than they thought they would.
• 32:47
  Speaker 2: When they go back to the children to ask whether
• 32:49
  Speaker 2: they might be able to help them out, it's not there.
• 32:52
  Speaker 2: The cupboard is bare. The money's gone. It's been sunk
• 32:56
  Speaker 2: into real estate or even more relevantly, it's gone through divorce. Now,
• 33:03
  Speaker 2: this is the thing that most of my clients are
• 33:05
  Speaker 2: coming to me saying, Morgan, I want to give my
• 33:08
  Speaker 2: daughter a million dollars to help her buy a house.
• 33:14
  Speaker 2: And we say, that's tremendous. We're all for it. But
• 33:18
  Speaker 2: you need to protect that advance. You need to secure
• 33:21
  Speaker 2: that advance and not make it a gift, but make
• 33:23
  Speaker 2: it a loan. And that loan is then secured by
• 33:26
  Speaker 2: a mortgage over the daughter's property. And if that daughter divorces,
• 33:31
  Speaker 2: and I don't want to put negative connotations on a
• 33:35
  Speaker 2: young love and all the rest of it, but it happens,
• 33:38
  Speaker 2: then this loan claws back the million dollars back into
• 33:43
  Speaker 2: the family kitty. And once the divorce is finalized and
• 33:47
  Speaker 2: everything's settled up, the money can be re-advanced back to
• 33:51
  Speaker 2: the daughter. So it doesn't fall into the marital pool
• 33:54
  Speaker 2: of disputed assets. This is probably number one reason why
• 33:59
  Speaker 2: clients come to me as the bank of mum and
• 34:02
  Speaker 2: dad for these inter-family loans. It's a real device to
• 34:09
  Speaker 2: protect against that risk. But it needs to be done properly.
• 34:15
  Speaker 2: Families traditionally work on handshake deals. Nothing's recorded. Nothing's ever
• 34:20
  Speaker 2: in writing. I'm not critical. That's just what families do.
• 34:23
  Speaker 2: That's what families do. And they only realize that they
• 34:28
  Speaker 2: should have treated it like a proper commercial transaction after
• 34:32
  Speaker 2: the horse is bolted. Once the marriage is on the rocks,
• 34:36
  Speaker 2: it's too late. You can't then do it. It's seen
• 34:38
  Speaker 2: as a sham. The family court will ignore it and
• 34:42
  Speaker 2: they won't even bother treating it as a real loan.
• 34:45
  Speaker 2: So if you take the effort to do it properly
• 34:48
  Speaker 2: to begin with, it really stacks up. You can't reverse
• 34:52
  Speaker 2: engineer one of these things in after the marriage has
• 34:55
  Speaker 2: already started to falter. Of course, that works for bankruptcy
• 34:58
  Speaker 2: as well. If you have a child who's in a
• 35:00
  Speaker 2: profession where there's risk, commercial risk, you don't want them
• 35:04
  Speaker 2: to have that asset in their own name because that
• 35:06
  Speaker 2: can be snaffled by creditors if they come knocking as well.
• 35:09
  Speaker 2: The same protocol works for that as well.
• 35:12
  Speaker 1: Lots to consider. Now we have chatted about different family makeups,
• 35:17
  Speaker 1: the increasing trend of people sort of marrying later in life.
• 35:20
  Speaker 1: And so there's two sets of kids involved. And so
• 35:23
  Speaker 1: I don't think David from Melbourne is going to be
• 35:25
  Speaker 1: alone in this. So his question is, I'm in my
• 35:29
  Speaker 1: second marriage. We both have adult children from our first marriages.
• 35:32
  Speaker 1: I want to ensure my current wife can stay in
• 35:36
  Speaker 1: our home if I die first, but I ultimately want
• 35:39
  Speaker 1: my share of our wealth I think his wealth really,
• 35:42
  Speaker 1: his share of his wealth to go to his biological
• 35:45
  Speaker 1: kids and not hers. How do I structure it so
• 35:49
  Speaker 1: it doesn't turn into an episode of succession and end
• 35:51
  Speaker 1: up in court?
• 35:55
  Speaker 2: I hear you loud and clear, David. This is absolutely
• 35:59
  Speaker 2: complicated scenario, number one on our list that we are
• 36:03
  Speaker 2: dealing with every single week. This is the modern family.
• 36:07
  Speaker 2: This is the reality of modern families. And you're not alone.
• 36:12
  Speaker 2: And I want you to think about the fact that
• 36:15
  Speaker 2: your estate planning is already in the complicated basket, right?
• 36:21
  Speaker 2: There is no simple solution for you, but there are
• 36:25
  Speaker 2: brilliant solutions. The one that pops out to me is
• 36:29
  Speaker 2: about looking after the family home for your new spouse
• 36:34
  Speaker 2: without letting them own it. Because once they own it,
• 36:37
  Speaker 2: it's in their pool of assets. given where we are
• 36:43
  Speaker 2: as a society and how long we're living is very real,
• 36:46
  Speaker 2: especially for men. The repartnering automatically puts that home into
• 36:51
  Speaker 2: the firing line as an asset of the marital pool.
• 36:54
  Speaker 2: So if you leave the home to your new spouse,
• 36:59
  Speaker 2: there is every likelihood that it will never return to
• 37:01
  Speaker 2: your biological children, even with good intention. It just drifts.
• 37:07
  Speaker 2: So we look to put it into testamentary trust. But
• 37:11
  Speaker 2: here's the thing. If you do not structure your testamentary
• 37:15
  Speaker 2: trust to specifically accommodate some rules around that home, that
• 37:20
  Speaker 2: family home, and nominate this spouse as a specified beneficiary
• 37:26
  Speaker 2: to live in that home, it will not be a
• 37:28
  Speaker 2: home any longer. It'll be an investment asset and it'll
• 37:31
  Speaker 2: start to accumulate capital gains tax. So if you can, yeah,
• 37:37
  Speaker 2: I know, but if you think of, if you deal
• 37:39
  Speaker 2: with it, with this lens, and this lens is to
• 37:42
  Speaker 2: try and unpick these bits and pieces, you can create
• 37:45
  Speaker 2: an environment where your spouse now has a home for life,
• 37:48
  Speaker 2: guaranteed roof over their head, which could even be sold
• 37:53
  Speaker 2: and turned into an accommodation bond for an aged care
• 37:56
  Speaker 2: facility in the future. These are the sort of flexibilities
• 37:59
  Speaker 2: that need to go into it. One more thing I'd
• 38:02
  Speaker 2: say about this is that you need to be very
• 38:04
  Speaker 2: careful about making, and I mentioned it earlier, adequate and
• 38:09
  Speaker 2: proper provision. And we have in the grand hierarchy of
• 38:14
  Speaker 2: our obligations, our number one obligation is to our spouse.
• 38:18
  Speaker 2: So we need to be seen to be making adequate
• 38:21
  Speaker 2: and proper provision. The roof over the head, tick, that's
• 38:24
  Speaker 2: one part of it. But the other part of it
• 38:26
  Speaker 2: is what's called a fund for contingencies, making sure that
• 38:30
  Speaker 2: the spouse has sufficient other assets so that they can
• 38:34
  Speaker 2: actually live. So If your spouse already has a million
• 38:38
  Speaker 2: dollars of cash and a super fund of her own,
• 38:40
  Speaker 2: you don't need to make that fund for contingencies. But
• 38:43
  Speaker 2: if they don't, then you need to make that fund
• 38:46
  Speaker 2: as well. So there's a lot of balancing acts here
• 38:49
  Speaker 2: with the blended family to get it right and to
• 38:52
  Speaker 2: avoid the disputes. Because in disputes, I've seen it like clockwork,
• 38:59
  Speaker 2: the spouse, second or third or even later spouse, who
• 39:04
  Speaker 2: is not adequately provided for, will come up trumps. They
• 39:07
  Speaker 2: will get the first pick of the litter, they'll get
• 39:11
  Speaker 2: chosen out first to be looked after, and then the
• 39:15
  Speaker 2: court will look to satisfy the adult children.
• 39:18
  Speaker 1: A work of art. I think I can wrap that up.
• 39:21
  Speaker 1: I feel like you're at the easel and there's all
• 39:25
  Speaker 1: these different colors going on. I think it's safe to
• 39:29
  Speaker 1: say that the idea of writing down your wishes with
• 39:31
  Speaker 1: a pen and paper might not cut it in this
• 39:34
  Speaker 1: day and age. Morgan Solomon, estate lawyer, knows his stuff.
• 39:38
  Speaker 1: Thank you so much for joining us today on The
• 39:40
  Speaker 1: Money Puzzle.
• 39:41
  Speaker 2: Oh, Julianne, it's been my absolute pleasure.
• 39:43
  Speaker 1: And thank you for listening. For more wealth insights, visit
• 39:46
  Speaker 1: theaustralian.com.au and consider signing up to our free wealth newsletter.
• 39:51
  Speaker 1: It is full of money tips and it is sent
• 39:53
  Speaker 1: out to you each week. Thanks for joining me.