How Does the 2018 Federal Budget Affect You and Your Family?

If you sat down at 7:30 last night to watch the 2018 Federal Budget Announcement, you may have found yourself a little overwhelmed. With so many figures and areas of taxation to get your head around, we have sat down, dissected and summarised the answers to the question you may be asking – “What’s in it for me (and my family)?”

Personal income tax

The Treasurer announced plans for a three-step, seven-year plan:

  • Step One: Effective immediate, low and middle income earners are to benefit from tax savings of up to $530 per person (or $1,060 per couple).
  • Step Two: From 1 July this year, the threshold of the 32.5% tax bracket will increase from $87,000 to $90,000, then will again increase in July 2022 from $90,000 to $120,000.
  • Step Three: From 2024-25, there will be just two income tax brackets for people earning over $41,000 per year: 32.5% for incomes between $41,001 and $200,000, and 45% for incomes exceeding $200,000.
  • The Medicare levy will remain at 2%.

Your superannuation

Have you ever considered changing your super fund, but found it cost-prohibitive because of high exit fees? Great news in this years budget– super funds will soon be banned from charging exit fees. But you’ll need to wait until 1 July 2019 to make your move.

Other changes to superannuation include:

The balance-eroding practice of automatically adding life insurance to a superannuation policy, no matter what the age of the person, will end. (To date, super members under the age of 25 pay nearly $200 million a year in life insurance fees through superannuation). Those under 25 are now required to ‘opt in’ to buying life insurance.

Companies can no longer automatically deduct life insurance cover for all funds where no contributions have been made for 13 months.

According to the Association of Superannuation Funds of Australia, more than 60% of Australians have multiple super funds. So, the ATO will turn their eye to inactive super accounts and merge them with their owners’ active funds.

  • Self-managed super funds (SMSFs) can now have 6 members, up from 4.
  • SMSFs with a history of good record keeping will be rewarded by reducing annual audits to 3 yearly audits.
  • People over 65 can put up to $300,000 into super from the proceeds of selling their home.
  • First home buyers who have made super contributions under the First Home Super Saver Scheme can access their money for eligible property purchases.


Young people living in rural and remote communities will find it easier to get access to Youth Allowance payments while they are studying away from home (eligibility for these payments is based on parental income).


The Federal Government will match funding with the states and territories to provide traineeships and apprenticeships for “high-demand” areas over four years. However, there is one caveat: each of the states and territories needed to sign up for this to go ahead.

Ageing Australia

There are a number of changes in this years budget to benefit older Australians. They include:

  • $1.6 billion over four years has been set aside so 14,000 seniors can stay in their homes rather than go into a nursing home.
  • $20 million for mental health nurses to support older people still living at home (the Government notes that men over 85 have the highest risk of suicide of all age groups).
  • $40 million has been budgeted for urgent building and maintenance work for aged care facilities in regional and remote areas.
  • $33 million has been set aside to address a chronic shortage of palliative care in nursing homes.
  • A one-year exemption from the ‘work test’ will apply to recent retirees who have less than $300,000 in total super savings.
  • The Pension Loans Scheme will be available to all Australians over Age Pension age and the maximum payments will increase to 150% of the full Age Pension.
  • Pension Work Bonus increases to $7,800 p.a. from $6,000.
  • Finally, the Government has pledged to make the aged-care system easier for families to navigate, simplifying forms and providing relevant online educational facilities.

Access to more affordable medicine: Granted, you will need to wait years for this, but it’s good to know the government will spend $302 million over four years to improve your access to generic and less expensive medicine.

Your health

There are plans to allocate $130 billion for public hospitals over five years. The government also proposed a crack down on unnecessary diagnostic tests.

Access to your own data. The government announced the establishment of a “consumer data right”. This will allow you to take control of your online personal data and safely share it with credible service providers, starting with the banking, energy and telecommunications sectors.

Small business

No budget would be complete without something for small businesses. If you run your own business, the current deduction on spending on eligible assets of up to $20,000 has been extended to July 2019. Another win: streamlining of GST reporting which, in turn, will save money – a welcome change for around 2.7 million small businesses.

Craft Beer Brewers. There are around 350 craft brewers in Australia, so chances are you aren’t one of them. However, most consider the tax changes that put small craft beer brewers at a disadvantage to be a victory for common sense. Beer sold in kegs larger than 48 litres have been taxed at a lower rate than smaller kegs, which in effect has favoured large producers. The change brings the lower tax level down to beer sold in kegs larger than the 8-litre size.


While not all of these changes are likely to affect you personally, you might give them your ‘tick’ of approval:

  • Multinational companies now to be policed and stopped from shifting profits to lower-taxing countries (they do this by loading up local operations with debt).
  • Online hotel booking websites based outside of Australia will now be taxed at the same rate as Australian businesses, ending the inequality that currently occurs between international and local booking providers.
  • Companies that are currently ‘pushing the boundaries’ and taking advantage of the research and development tax incentive scheme will be stopped. This will ensure funding goes to genuinely innovative spending.
  • A $1.3 billion plan to support Australia as a ‘global leader’ in medical technology, biotechnology and pharmaceuticals.
  • The ATO will turn an eye to the ‘Black Market Economy”, with more audits, ‘mobile strike teams’ and a ‘Black Economy Hotline’ for the public to report suspicious activity of businesses attempting to avoid paying tax.

Budget Questions?

If you have any questions, your mortgage broker is always ready to help.

Student Loans

Student Loans and the Federal Family Education Loan Program

Established by an Act of Congress in 1965 and started in 1966, the Federal Family Education Loan Program (FFELP) is a partnership program between the federal government and private lenders and an umbrella program which includes Stafford loans, student PLUS loans and Perkins loans. Since it started more than half a trillion dollars have been disbursed through this program.

Funds for the program are provided by a network of independent banks, credit unions and other financial institutions and lenders are generally happy to make money available in what would normally be considered a high risk area of ‚Äč‚Äčlending because loans are to a large degree (although not totally) underwritten by the federal government. In about five percent of cases private guarantors do become involved with defaulted loans and are able to make application to the federal government for at least partial reimbursement.

The vast majority of funds are used for subsidized and unsubsidized Stafford loans. In the case of subsidized loans the federal government pays the interest on loans while students are attending full-time courses (and for up to six months after graduation), while in the case of unsubsidized loans students are responsible for paying the interest due on their loans. Interest is not however normally paid on unsubsidized loans while a student is attending full-time education (and again for up to six months after graduation) but is added to the loan.

The other program with attracts major funding is the student PLUS loans program which is designed to allow parents to take out loans on behalf of their children. This program was extended in 2006 and is now also available to professional and graduate students. The student PLUS loans program is becoming an increasingly important part of college funding these days.

Applications to the Federal Family Education Loan Program are normally made using a Free Application for Student Aid (FAFSA) application form which is submitted to the loans officer at the college for which the student has been accepted. Applications are then examined and loans granted on the basis of the information provided and the availability of funds for disbursement.

Loans are normally disbursed at least twice each year (depending upon the academic timetable followed by the college) and it is common for the bulk of each loan to be paid directly to the college to cover tuition and other fees, with the balance then being paid over to the student or parent, less fees.

In most, but certainly not all cases, a fee of about 4% is payable which is made up of a 3% administration, or 'originating', fee and a 1% insurance fee. It is not uncommon however for higher fees to be charged and so it is important to ask about the fee structure and, if necessary, to shop around when applying for student loans.

Wealth Building

Estate Tax Planning & Family Limited Partnerships

The general partner(s) manage the assets contributed to the family limited partnership. Limited partners generally have no rights with respect to the assets held by the FLP. The lack of Marketability and the fractional ownership of the limited partnership interests held by the limited partners are two of the well-established reduction principles that diminish the value of the taxable estate. The discounts allowed by the restricted rights provides for the reduction in the value of the assets held by each limited partner, but also increases the amount of annual tax-free gifting that can be attained. The current high marginal estate tax rates allow for wise and prudent planning which is necessary to preserve the family’s wealth.

Centralized Management of Family Assets

When using a corporation as the general partner, the general partner controls all of the assets in the partnership. This corporation can also employ family members and others. It will call meeting, conduct training sessions and facilitate wealth management. With a corporate general partner, continuity must be ensured even in the event of the husband and wife.

Minimize Probate

By using an FLP, the time and expense of probating an estate can be greatly reduced. When a Living Trust is also used, then there is no probate. Living Wills are not public record and therefore no one but those involved in the family know of its contents.

Cure Title Defects

The procedure for transferring assets to an FLP can help with the discovery of title defects. This can be a significant issue for real estate assets if not discovered and corrected.


Investing In Multi Family Properties

There are many ways to get started in real estate investing. For the beginner, a good strategy might be to purchase a multi family unit to rent out. Four families or less per building is the ideal size to look for. This will allow you to still acquire a building with a residential mortgage, taking advantage of the lower interest rates. Here are some great reasons why investing in a multi family building can be less risky than other types of housing.

First is competition. There are going to be more investors going after those single family houses. This can drive the price of those houses up to a point where they will not cash flow for you. Do not depend on appreciation to create cash flow. You need your properties to be cash flow positive right out of the gate. If you are considering being a landlord, you might as well purchase a unit that has more than one tenant option.

Then there is the fact that you have more than one unit to rent out. If you purchase a single family house and the tenant skips town, you have to cover the entire mortgage payment until you get it re-rented. With a multi family, it would be highly unlikely that all of your units would be unoccupied all at once, giving you a bit of a cushion. If you have a four unit building, having one tenant gone may not even put you in negative cash flow! This could make all the difference in the world for your yearly profit.

Multi family units bring you more money per month. Depending on your market, duplex or triplex properties can be around the same price as a single family house. However, you can get more rent from 2 units than a single unit. So, you will be getting more money per month for approximately the same mortgage payment. Which means more positive cash flow – the most important aspect of real estate investing!

Repair costs per unit average out to be less. If you have 3 single family homes and need to replace the roof on each one, that is a lot of money per unit. However, if you have a triplex that needs a new roof, you are in effect replacing 3 roofs in one, making the cost per unit decrease. Same thing goes for maintenance, it's less travel time to go from unit to unit, maximizing labor costs.

As you grow your real estate portfolio, the increased cash flow given to you from your multi family units will allow you to be able to afford a property management company if you want. This will free up your time to find other deals, or do whatever you want!

So, don't get stuck in the mindset that real estate investing only involves single family homes. Smart investors will have a portfolio that includes a mix of single and multi family properties. Just work the numbers and you may find multi family investing to be profitable for you!

Wealth Building

Don’t Let Poor Estate Planning Tear Your Family Apart

Even if your kids are grown up with families of their own, you can probably remember scenes of intense sibling rivalry when they were younger. In some families, that competition continues into adulthood; for others, it recedes as children age and mature. But it can all come flooding back while trying to divide up your estate after your death as your kids argue over who gets what.

If you die without a will, a court will decide, based on state law, who will inherit your property. In most cases, the result might be contrary to your wishes. Think of all the assets you’ve accumulated: house, car, jewelry, investments, family heirlooms and more. “It is simply not enough to say ‘let them just divide it evenly or work it out themselves,'” says Gerald A. Youngs, president of the National Association of Estate Planners & Councils (NAEPC). This is sure to create problems and expenses due to probate laws, state laws and court appointed strangers making family decisions.

“While many people worry about the federal estate tax, the truth is most of us won’t have a tax problem under the current tax laws,” says Youngs. “But the ‘family tax’ is a very real concern,” he adds. The family tax is the price paid by children, grand-children and favorite charities when you do not express your wishes legally. The family tax is paid not only with money, but also with hard feelings.

But it doesn’t have to be this way. You can make it easy on you and your family by taking a few simple steps to make sure your estate is in order. Whatever the size of your estate, the first step is to have your intentions put in writing, either in a basic will or a will plus the trust documents that will be needed to carry out your wishes. An estate planning professional can help you make the best decision for your situation.

Once you have a plan in place, discuss it with your family. If anyone has any questions about the details, or any quibbles, you can address them and put to rest any future squabbles. While your family shouldn’t dictate your actions, they should be informed about them.

This is also a good time to discuss dividing up personal property. People often arrange for the executor of their will to divide personal property their spouse doesn’t want (such as furniture and jewelry) among their children. Simply leaving it at that can cause problems. It is better to put together a list with a description of the property and who you’d like to have it – if you have specific requests or wishes. You can put this list together with input from your children to alleviate any hard feelings later. (See footnote at end of this article).

Putting together an estate plan is not as daunting as it might seem at first, and it pays big dividends in the long run. Not having an estate plan in place can cost you not only in dollars and cents, but also in family discord.

If you need help finding specialists in this kind of planning, look for individuals who have earned the designation AEP (Accredited Estate Planner) or EPLS (Estate Planning Law Specialist); ask about the Estate Planning Council members in your area; or call the National Association of Estate Planners & Councils at 866-226-2224 (toll free) or visit their website at for a referral to a professional near you.

(This article originally appeared in the NAEPC newsletter – National Association of Estate Planners & Councils. Reprinted by permission from

NOTE: The system for division of property taught in THE SETTLEMENT GAME: How to Settle an Estate Peacefully and Fairly may provide a better solution to this problem. It teaches how to divide property fairly, yet keep peace and avoid conflict among siblings or other family members when going through this process.

Contributed by Angie Epting Morris, Author


How to Settle an Estate Peacefully and Fairly


Wealth Building

Estate Planning With Family Partnerships

For estate planning purposes, a family partnership is typically a limited liability company or a limited partnership. A limited liability company ("LLC") is an entity that combines the limited liability of a corporation with the "pass-through" taxation of a partnership. A family limited liability company ("FLLC") is a standard LLC which is owned exclusively by family members. The typical FLLC is formed with two classes of ownership interests (voting and non-voting), and is managed by a "manager" who is selected by the owners (or "members"). A family limited partnership ("FLP") is very similar to an FLLC. Although, an FLLC offers more protection than an FLP since no general partner (with unlimited liability) is required.


Parents transfer $ 2 million of commercial real estate to an FLLC in exchange for a 1% voting interest and a 99% non-voting interest. With the voting interest they appoint themselves as the managers of the FLLC. Soon afterward, they gift the non-voting interests to their children, grandchildren and / or to trusts for the benefit of their children and grandchildren (the "donees"). These gifts will be gift tax-free to the extent of the parents' $ 13,000 ($ 26,000 for a married couple) annual gift tax exclusion and $ 1,000,000 ($ 2,000,000 for a married couple) lifetime gift tax exemption.

There is no gain or loss to the parents upon the contribution of the real estate to the FLLC. The parents, as managers, will continue to manage the real estate and can even receive a reasonable management fee for their services. Each member will owe income taxes on his / her / its proportionate share of the FLLC's income.

Tax Advantages

o The future income and appreciation on the nonvoting membership interests gifted are removed from the parents' gross estates, even though the parents continue to manage the FLLC. While there is a present lapse in the estate and generation-skipping transfer taxes, it's likely that Congress will reinstate both taxes (perhaps even retroactively) some time during 2010. If not, on January 1, 2011, the estate tax exemption (which was $ 3.5 million in 2009) becomes $ 1 million, and the top estate tax rate (which was 45% in 2009) becomes 55%.

o To the extent the donees are in lower income tax brackets than the parents, income tax savings are achieved.

o If the gifts of the non-voting membership interests are made to a so-called "grantor trust" established by one of the parents, the grantor-parent will be taxed on the trust's income. The grantor's payment of the trust's income taxes is the equivalent of a tax-free gift to the beneficiaries of the trust.

o Because the non-voting membership interests lack control and lack marketability, those membership interests are usually eligible for significant valuation discounts, ranging from 15% to 45%! Such discounts "leverage" the parents' $ 13,000 / $ 26,000 annual gift tax exclusion and $ 1,000,000 / $ 2,000,000 lifetime gift tax exemption.

Non-Tax Advantages

o An FLLC allows the donor to serve as the manager of the FLLC even if he / she gives away 100% of his / her membership interests in the FLLC.

o An FLLC makes it much easier to make fractional interest gifts of assets like real estate which would otherwise require the preparation and recording of separate deeds each time a gift is made.

o An FLLC consolidates investment assets to promote efficient and centralized management of those assets. It also allows donors to involve their heirs in the operation of the FLLC without losing control. Finally, FLLCs provide the members with privacy since the state filings and annual reports neither require the names of the members to be disclosed nor any information regarding the FLLC's underlying assets.

Asset Protection

Outside Protection. The FLLC accomplishes the goal of protecting the members' personal assets from business risks. Members of an FLLC are generally not liable for the debts, contracts or acts of the FLLC. In other words, a member's personal wealth is not exposed to the "outside" debts and liabilities of the FLLC. Members can only lose what they invest in the FLLC. However, this protection will not shield the FLLC's members from personal liability arising from unlawful acts committed personally or contracts signed personally.

Inside Protection. Conversely, the FLLC's assets are protected from the creditors of one of the members. The creditors of a member cannot force a sale of a member's interest, nor do they step into the member's shoes as a substitute member. The creditor can only apply to the court for a "charging under" to require the FLLC to pay to the creditor distributions that would otherwise go to the debtor / member. However, if the manager of the FLLC decides not to make distributions, then the creditor (as opposed to the debtor / member) may be taxed on the FLLC's undistributed income. This potential for negative cash flow may facilitate an out of court settlement for pennies on the dollar. Thus, the debtor / member receives "inside" protection from his / her personal creditors.

Proper Administration

The IRS has been scrutinizing FLLCs closely and has challenged the size of the valuation discounts applied to the non-voting membership interests. The burden of proving the appropriateness of the discounts falls on the taxpayer. Thus, following are the leading principles established by recent cases to achieve the desired results:

o The FLLC must be operated as an actual business, including maintenance of accurate records, proper titling of assets, and compliance with applicable laws as well as the FLLC's governing documents.

o Assets transferred to the FLLC should not be used for the donor's personal use (unless fair market value rent is paid), nor leave the donor without sufficient assets to maintain his / her standard of living without having to rely on distributions from the FLLC. Moreover, there should be no commingling of the donor's assets with the FLLC's assts.

o When distributions are made by the FLLC, they must be made to all members in proportion to their respective membership interests.

IRS Challenges

Recently, the IRS has been successful in including in a decedent's estate all of the assets that the decedent transferred to an FLP or FLLC. Under Internal Revenue Code Section 2036, transferred assets can be included in the transferor's estate if the transferor retained until his / her death (1) the possession or enjoyment of the assets, or (2) the right to determine who would possess or enjoy the assets.

Despite the IRS's recent success in some cases, the FLLC remains a powerful vehicle for transferring wealth when properly designed and operated.

Following, is a checklist of ways to minimize an IRS attack under IRC Section 2036:

1. Include some operating business or real estate investment in the FLLC. Do not transfer personal use assets to the entity.
2. Create the FLLC well before death, and adhere to the terms of the operating agreement.
3. Do not transfer all of the donor's assets to the FLLC; and make sure the donor has sufficient liquidity apart from the FLLC.
4. Distribute profits unless needed for business purposes; and always make distributions pro rata.
5. Avoid making distributions, before and after death, to meet the personal obligations of the donor or the liabilities of the donor's estate.
6. Document the business purpose in the operating agreement.
7. Keep valuation discounts within amounts that are less likely to draw audit suspicion.
8. Have junior generational members contribute capital to the FLLC, instead of relying exclusively on gifts of membership interests.
9. Have annual partnership meetings to update events; and actively manage the FLLC's assets.
10. Finally, by operating the FLLC as though the members were non-family members, the likelihood of challenging an IRS attack should be much greater.


In order to achieve the desired tax results, the FLLC must have a valid business purpose. Whether a valid business purpose exists (other than to secure tax benefits) is a facts and circumstances test requiring the input of estate planning. In any event, the FLLC is an important technique that should be considered as part of any estate plan, asset protection plan, or business succession plan.


Wealth Building

Tips in Making a Family Tree for Your Estate Plan

Creating a Family Tree is a helpful method to guarantee your estate plan encompasses all your wishes for distribution of your property.

A comprehensive estate plan includes a Last Will and Testament, Living Trust, Living Will and insurance policies. Depending on your personal circumstances, you may or may not need all of these documents.

Each of these documents involves making specific bequests to family, friends or charitable organizations.

It can be confusing trying to sort out the various bequests and properties made in each estate planning document. Drawing a Family Tree will help you make certain you have left bequests or property to each individual you wish to and no one is forgotten.

Outlining a Family Tree

If your parents are surviving, write their names at the top of your tree. Draw a line down to yourself. Extend the line horizontally and write down your siblings’ names.

Next, draw a line down from yourself and write in your children’s names. Do the same with your siblings’ names and mark down their children’s names.

If you wish to go further with your Family Tree, you can include your parents’ siblings and their children by drawing another horizontal line from your parents and continuing with the same format you used for you and your siblings.

It is beneficial to include birthdates and addresses, if possible. The more contact information you can include in an estate planning document about a beneficiary, the better. A common problem in distributing estates is locating beneficiaries. In some cases, the beneficiary never receives the bequest because he or she cannot be found. You can prevent someone you love not receiving his or her share of your estate by verifying personal information.

Assigning Bequests

Once you are satisfied with your Family Tree, the next step is to start with bequest designations. If you are married, you may want to leave your entire estate to your spouse. Alternatively, you could give the majority of your estate to your spouse and leave small bequests for other special people in your lives.

Parents likely want to divide their estate amongst their children. Grandparents might wish to divide their estate amongst both children and grandchildren. You do not have to divide your estate equally amongst your beneficiaries. You can allocate different size proportions to your beneficiaries.


Finally, double-check your family tree once you have finished to ensure you have included all your close relatives, their birthdates and addresses and written a bequest for those you have chosen.

Once you have completed the Family Tree, you can tell at a glance exactly what each person is receiving as a bequest.

If you’d like to learn more about making your family’s history part of your estate plan, contact our office today.

Wealth Building

Finding the Best Estate Planning Attorney for Your Family

Few things are more important to the success of your estate plan than the attorney you choose to design and draft it. Almost as important is the relationship that is formed between that attorney and other professional advisors who serve you in the areas of financial advice and accounting.

All successful estate planning is the result of several professions working together for the good of the client. However, professionals of one group sometimes have misconceptions of professionals belonging to other groups. For example, the financial advisor may see the estate planning attorney as little more than a document scrivener. But this is far from the truth.

Many attorneys who limit their practice to estate planning are values-based, relationship-driven, client-centered and counseling-oriented. And the good ones are willing to work together with other professionals on your behalf. They understand that thorough estate planning involves more than just legal advice. The key is to find those attorneys who meet this description.

So where do you find these rare creatures? How do you know if you’re dealing with the right kind of attorney? The right kind of attorney will have an orientation toward relationship-building and counseling rather than mere document preparation. The first thing he or she will offer is the ability to listen carefully to not only your goals – but also your hopes, dreams, and aspirations for yourself and your loved ones. The attorney will carry on a sensitive dialogue that will enable you to make clear your wishes to maintain control over your affairs, to be cared for properly in the event of a disability and to provide meaningfully for your loved ones after you are gone.

It’s About More Than Just Taxes

Any competent estate planning attorney can help you navigate the legal intricacies and tax laws that pertain to the passing of wealth. But the right kind of estate planning attorney will also be interested in your desire to pass along more than just money. He or she will ask about and explain how to accomplish such things as:

ofunding the education of offspring for several generations

omeeting philanthropic goals that will leave a legacy for your community

opreserving family history and stories that support the values you believe in

ocontinuing or divesting a family business

ocaring for a surviving spouse regardless of circumstances

oand much more.

On a less positive, but equally important note, the right kind of attorney will ask about such things as:

othe complexities of the family relationships that may exist due to second marriage situations

othe special health needs of a grandchild

othe son or daughter-in-law who is not to be trusted

othe child or grandchild who is a spendthrift or suffers from substance abuse

Such in-depth counseling forms a strong foundation on which a long-term relationship is built. That relationship is important because an estate plan is not a transaction. Rather, it’s an ongoing process that should be reviewed from time to time throughout your life – and potentially survives through several generations. You may choose to involve your adult children in the planning process, and the right attorney will build a relationship with them as well.

An Interdisciplinary Approach

Another trait of the right kind of attorney is true commitment to the team approach in estate planning. A good estate planning attorney recognizes that every member of the planning team (including the investment advisor, the insurance professional and the CPA) is vital to the success of the plan. The right attorney will involve the other advisors in the long-term relationship you have to the degree that you are comfortable with that arrangement.

Legal documents are not enough. Even documents that have been drafted from in-depth counseling and are custom-designed to meet the unique needs of the client are not enough. Documents standing alone are like the proverbial automobile without fuel.

The documents’ instructions only apply to assets that are properly owned.

For example, a will only controls those things owned in the individual’s name–not jointly. The trust only controls those things owned by the trustee of the trust. An irrevocable life insurance trust works only if it is properly funded with a suitable insurance policy. Advanced entities require careful balancing of assets for maximum effectiveness. Accurate valuation of your business interests is imperative. New planning tools often require additional accounting and tax advice.

Financial and insurance advisors, as well as accountants, provide the fuel that is needed to help ensure that appropriate financial assets are allocated and funded correctly, offer necessary valuations and tax returns, and provide the means for proper balance within the plan. The estate planning attorney you work with should not only recognize these truths, but be cooperative and collegial with the other professionals that are providing these things.

Each member of the interdisciplinary team provides a cross-check for the other members. If there is disagreement among the professionals on a strategy or its implementation, it can be discussed and worked out between them as a team. After all, estate planning is both an art and a science. In this way, you are served with unanimous agreement among the professionals instead of getting contradicting advice from multiple sources. Mutual respect and clear protocols will characterize the interdisciplinary team that is working well together. Each team member will know exactly what is expected of him or her, and communication with each other and with you will be constant and clear.

As mentioned, the right kind of attorney will be focused on a long-term (even multi-generational) relationship you and your family. Therefore, the attorney will not have a transactional approach to the estate plan, but rather a process approach. An estate plan is never really done until the person doing the planning has passed away and every instruction for every beneficiary of every subsequent generation has been carried out. Those who speak of the plan in the past tense (“They did their estate plan…”) may have a shortsighted perspective.

A Strategic Process to Support the Relationships

The client-centered attorney will ensure that everything possible is done so that the plan is carried to fruition and your expectations are met.

There is nothing as constant as change. Your personal, family and financial situations change all the time. Kids get married and have children; there are divorces and remarriages; real estate and financial assets change value as the market goes up or down; a child marries someone you don’t approve of; a grandchild gets involved with drugs; you win the lottery; and so on.

In addition, laws (both tax and non-tax) change constantly. First we have an estate tax. Then we’re told the estate tax isn’t so bad. The estate tax is abolished. Oops, the estate tax is back! Assets in retirement accounts and trusts are protected from creditors and predators. But then a court in one state says that some protected assets may not be protected in certain circumstances. There’s no way that a will or a trust drafted 20 years ago (or even 5 years ago) is current with all those changes. So updating and maintenance of the plan are required in order for it to work.

The other thing that is constantly changing (or should be) is the growth and education of the attorney and every advisor working with you on your plan. Over time, new planning strategies are developed, new tools are discovered, and there are better ways to accomplish a goal. Of course, you will continue growing as well, and your goals for the plan could change.

The right estate planning attorney has systems in place to ensure he or she stays in touch with you, that the rest of the planning team knows of changes, and that there are methods to adjust the plan in light of those changes. As every member of the planning team focuses on the needs of the client, the process will run smoothly, and you will be more comfortable with the advice that is given and the decisions you make.

The attorney will also be aware that for a plan to work well, the people who will help in the future need to know what’s going on.

If the children will someday serve as trustees and personal representatives, the attorney might be involved in teaching those children what to do. If ongoing trusts have been established to protect those children and grandchildren, the other advisors should be available to continue serving as advisors to the subsequent generations instead of losing that expertise and familiarity. The client-centered interdisciplinary approach can make that happen.

Your Role in the Estate Planning Process

Your role in the process is an active role, not a passive one. You should avoid the attorney who is content with simply telling you what to do, and then throwing together some documents to accomplish it. That is the attorney’s plan – not yours.

In summary, if you’re working with the right estate planning attorney, you should plan on being involved in three distinct steps:

1. Develop a plan with counseling-oriented (rather than document-oriented) professionals.

2. Commit you and your family to an ongoing maintenance and education program.

3. Assure that your wisdom is passed along with your wealth.

As you consider those you love, and those material things that you’ll someday leave behind, only a properly designed and implemented estate plan can ensure that your goals for those loved ones are accomplished.

Many estate plans in America don’t work. They often consist of fill-in-the-blank documents, delivered in a one-time transaction, and never updated. If that’s all an attorney can offer, that’s not the right attorney for you. Choose an attorney that is counseling-oriented, values-based, and as strong on relationships as he or she is on the law.

Wealth Building

How to Choose the Best Estate Planning Attorney For You and Your Family

Legacy & Estate Planning allows clients to address their values, finances and legacy plan progress. For most professionals and entrepreneurs the importance of proper estate planning need not be stressed. When you hear the term estate, it refers to everything that you have worked hard to accumulate. Your home, real estate, bank accounts, stocks, bonds, mutual funds, cars, life insurance, business interests, artwork and jewelry. Without proper planning and based on the amount of total assets that you own there could be a hefty tax bill to upwards of 55%. Additionally, your beneficiaries may also be delayed and inconvenienced with all of the requirements in settling your estate.

When you arrive at the important decision to hire an estate planner you want the best for your family. You will have to consider if you want a traditional estate planner who only focuses on the hard numbers and physical assets or would you prefer a holistic counselor who also incorporates legacy development and planning into the process. Conscientious adults make an effort to bank with the best, invest with the best and associate with the best. When seeking to hire a planner the qualities you need to look for include the following.


The sensitivity of your personal financial matters dictates that you need to have a high level of trust in the counselor who assists you with planning. Most high net worth individuals utilize a team approach that includes their accountant, their financial advisor and an estate planning attorney. Each of these professionals typically are competent and knowledgeable and have earned the clients trust over time and through reputation. The importance of using the team is that most already have these separate advisors in place, in order to keep an orderly ship, communication and collaboration is stressed so that all goals can be working simultaneously toward similar objectives. A separate approach often leads to undesired inefficiencies.


You should hire an estate planning lawyer that is highly professional. Your estate planning lawyer should be a recognized leader in his or her field and typically hold a special certification or advanced legal degree. In many instances your estate planning lawyer will be standing in your shoes as a professional representative of your interests and affairs. It is important that such an important representative properly represent your family’s good will and precious resources. If you have a complicated situation or lots of assets, choose someone experienced with complex situations and issues so they will always be a shining reflection of your initial decision to hire them in the first place.


Since estate planning will deal with all or most of your assets, you should hire an estate planning lawyer that is reliable and ethical. This fact can be checked by asking the lawyer if anyone has ever filed a complaint against them in the past. Most will answer honestly, but it is a question of ethics so one should always stay alert. An ethical estate planning lawyer should consider all your needs and best interests above everything else. An ethical planner will always provide sound and legal advice and never recommend faddish or illegal scams to save or hide money.


Commitment to a high standard of quality is a good characteristic in an estate planning attorney. Your planner should provide a warm and courteous environment that fosters a sense of security and accomplishment. Attention to the smallest detail in addressing every last issue in your legacy and estate planning process is the trademark of and excellent planning institution. Your planner is willing to stay until the job is complete and will not have problems working with your investment advisor, accountant and insurance professional. In the most productive relationships your planner is a multi-generational partner who will work with you side-by-side through a process that at times can be long and arduous, but is made simple and enjoyable due to their enthusiasm and pride in their work.

When you take the time to consider the long term implications of preparing a solid plan the question of who will prepare my plan becomes far more important. Utilize these tips and you should find a rewarding and securing planning experience just around the corner.


Keep That Farm in the Family With a Reverse Farm Mortgage

It is sometimes hard to keep your farm running profitably. It may be costing you too much to keep the farm in top shape while at the same time try to make a profit. If the farm has been in your family for generations, you may not be willing to sell it even if you stand to make a profit. Many farmers today are looking to find lenders for reverse farm mortgages to help them deal with this type of situation.

There are some specific requirements necessary in order to qualify for a reverse farm mortgage. They are basically the same as with any reverse mortgage, primary that the borrower is 62 years old or older and must be a property owner. Once the reverse mortgage is obtained, the owner (borrower) is given funds in a lump sum or as monthly payments and he is not required to give up the property as long as he is still using or living in it.

A reverse farm mortgage is a low-interest loan available only to senior citizens who own their own homes (farms). The equity that has been built up in the home (farm) is used as collateral and the amount of the loan is a percentage of the home’s (farm’s) value. This loan does not have to be repaid until the home or farm is vacated permanently by the owner or until the owner passes away. The estate then has approximately 12 months to repay any balance remaining on the reverse mortgage or has the option of selling the home (farm) to pay off the balance.

A farmer has several options to choose from when obtaining a reverse farm mortgage. He can receive monthly payments, a lump sum payment or a combination of both when funds are distributed from the reverse mortgage. Then, as with a regular reverse mortgage, the money received can be spent in any way the borrower chooses. One option might be to purchase better farm equipment so that overall productivity on the farm will be increased.

With a reverse mortgage a farmer has the funds he needs and doesn’t have to worry about losing his precious farmland. He will be able to continue working on the farm and have additional income to use for increased farm productivity.

To be eligible for a HUD reverse mortgage, the Federal Housing Administration requires that all homeowners must have reached the age of 62. They must own their own home (farm) or have at least paid off approximately half of the mortgage. HUD requires no income or credit requires for a reverse mortgage.

It is sometimes hard to keep your farm running profitably. It may be costing you too much to keep the farm in top shape while at the same time try to make a profit. If the farm has been in your family for generations, you may not be willing to sell it even if you stand to make a profit. Many farmers today are looking to find lenders for reverse farm mortgages to help them deal with this type of situation.

There are some specific requirements necessary in order to qualify for a reverse farm mortgage. They are basically the same as with any reverse mortgage, primary that the borrower is 62 years old or older and must be a property owner. Once the reverse mortgage is obtained, the owner (borrower) is given funds in a lump sum or as monthly payments and he is not required to give up the property as long as he is still using or living in it.

A reverse farm mortgage is a low-interest loan available only to senior citizens who own their own homes (farms). The equity that has been built up in the home (farm) is used as collateral and the amount of the loan is a percentage of the home’s (farm’s) value. This loan does not have to be repaid until the home or farm is vacated permanently by the owner or until the owner passes away. The estate then has approximately 12 months to repay any balance remaining on the reverse mortgage or has the option of selling the home (farm) to pay off the balance.

A farmer has several options to choose from when obtaining a reverse farm mortgage. He can receive monthly payments, a lump sum payment or a combination of both when funds are distributed from the reverse mortgage. Then, as with a regular reverse mortgage, the money received can be spent in any way the borrower chooses. One option might be to purchase better farm equipment so that overall productivity on the farm will be increased.

With a reverse mortgage a farmer has the funds he needs and doesn’t have to worry about losing his precious farmland. He will be able to continue working on the farm and have additional income to use for increased farm productivity.

To be eligible for a HUD reverse mortgage, the Federal Housing Administration requires that all homeowners must have reached the age of 62. They must own their own home (farm) or have at least paid off approximately half of the mortgage. HUD requires no income or credit requires for a reverse mortgage.