Helping you plan for your future care needs
If you or a family member can no longer manage to live independently at home, you may need to consider moving into residential aged care. Before you do, there are many factors to consider, including your eligibility, the costs involved and the effect on your finances and lifestyle.
Our advisers can assist by explaining the various aged care options and provide advice on a range of areas including:
- accommodation bonds
- minimising fees and charges
- maintaining the Age Pension and other social security entitlement
- implications of keeping or selling the family home
- structuring income and assets to meet the ongoing costs of aged care
- the potential taxation implications of different aged care options and decisions
- estate planning needs such as Wills and Powers of Attorney
Getting the right financial advice
Residential aged care is a complex area. Getting the right professional advice can make all the difference in ensuring your assets and income are structured effectively, minimising any changes to your pension payments and ensuring you have sufficient income to support your lifestyle and care needs for a comfortable stay.
No two financial plans are the same, especially when you take into account the different stages of life. For instance, a person in their 30s will need very different advice from someone in their 60s. From our perspective, an individual’s working lifetime can be broken into four major life stages:
Stage 1: Young Professionals
Stage 2: Couples and families
Stage 3: Pre retirees
Stage 4: Retirees
Within each of these life stages, there are different priorities, financial challenges, and goals that individuals face. By preparing and planning for the next stage of life, you will stand the best chance of fulfilling your dreams and aspirations.
Business Succession Planning
If you have a business, then you will need a succession plan. It can be anything, simple to complex, short, or long term, internal or external strategy. Each plan is unique to your own situation, and will be critical to the success when you step away from the business, or retire.
When correct, succession planning can be more about growing than going. A great succession plan with a structure and timelines can and should be the long-term growth strategy for your business. Other important elements to a succession plan can include things such as:
- To put adequate insurance plans — such as death and disability in place
- Transitioning a business can involve many small steps
- Being able to work less, earn more, and grow the business
- Ability to stay involved in the business as long as you want
- Optimise and realise the best value for your business
Instead of just focusing on the structure of transition, we take a holistic approach by helping you create a plan for your life after exiting the business. Our advisers also help assess how business succession planning can help you protect what is important. They can work with your legal adviser, and accountant, where appropriate, to ensure your plan meets your needs and objectives.
Self Managed Super Funds
WANT TO MANAGE YOUR OWN SUPER FUND?
Self-Managed Super Funds (SMSF) are a growth area in Australia, with more and more business owners electing to have total control of the investment of their hard-earned retirement dollars.
There is no doubt that a properly structured and well-managed SMSF is an excellent wealth creation vehicle. However, the Australian Taxation Office closely monitors these funds, so it is vitally important that trustees seek professional advice on all aspects of their fund, from creation and compliance, through to a properly documented investment strategy.
We offer specialist advice on establishing, implementing, and running a SMSF. Your fund will be entirely compliant with the ever-changing Government guidelines.
The term “retirement” means different things to different people. For most is it is simply the next chapter in their journey of life. Like any new chapter, good preparation can go a long way in ensuring you’re emotionally and financially ready for the road ahead.
Every good plan requires a checklist, and the retirement planning checklist should include consideration of the following:
What age do I want to retire by?
What does my retirement look like? What activities are on my to-do list?
How will I save for retirement?
Am I eligible for any government income support?
Will my debts be paid out by retirement?
Will I relocate or downsize?
Do I have other matters that may need addressing?
- Insurance – you might have insurance, but it’s worth checking you have the right type and enough of it for your retirement planning. After all, what you require in retirement could be quite different to when you are working.
- Investment preferences – attitude to risk, preferred investments, structures such as superannuation or trusts, tax effectiveness, can I invest more conservatively in retirement or will this risk me running out of money too soon?
- Estate planning – Have you documented how you want your assets to be distributed after you’re gone and how you want to be looked after if you can’t make decisions later in life?
Financial Planning for SME’s
Do you have a business, or are considering starting one? There is an allure in being master of one’s own professional success.
Being the boss can be exhilarating. But there are also significant risks to going out on your own. Unfortunately, the failure rate of small business is high, with less than 50 percent of new businesses surviving for five years. The keys to success lie in proper budgeting, determining the right product for your market or audience, marketing that product, and then selling it at the right volume and the right price.
What small business owners sometimes forget is that they need to adapt their own individual financial plans for the new realities and risks of being a business owner.
Comprehensive financial planning for an individual or couple generally involves tax planning, risk management, investment planning, retirement planning and gift and estate planning. For each of these areas, let’s consider how business ownership takes this planning to another level.
Risk Management – interruption of the business due to disaster; death or disability of a person key to the success of the business; loss of business property; and lawsuits resulting from negligence or defective products. This last risk can be addressed in part by the legal structure of the business, but the others require specialized insurance coverage over and beyond what the owner holds for himself and his family.
Retirement Planning – It’s not uncommon for business owners to assume they will never retire. After all, they’re presumably doing what they love, so why not continue indefinitely? Alternatively, they may see the business as the only retirement plan necessary – as a source of capital that will fund their retirement needs. Thinking along these lines is generally a mistake: If anything, a business owner may need more retirement planning rather than less, to prepare for the time when he no longer can or wishes to work, and/or the business cannot fully provide for his financial needs. The good news is that business ownership affords all sorts of tax-advantaged ways to save for retirement, and the ability to put aside amounts considerably larger than what is permissible to non-business owners.
Investment Planning – Most small businesses are self-financed by their owners, which results in the business becoming the owner’s major or even sole investment. Even when the owner has extra capital to make other investments, they may still prefer to put their money back into their business, where they feel they have the most control over their his returns. Prudent planning nevertheless must be focused on diversification. Asset classes and investments must be carefully selected for the owner’s personal portfolio to offset the concentrated risk they are taking with the business.
Estate Planning – If a small business grows and becomes a valuable asset, simple wills or family trusts set up for personal affairs may no longer suffice for the transfer of the business. More sophisticated financial planning techniques will be necessary to ensure business continuity after death, reduce any estate taxes assessed for the business, and to provide liquidity to heirs to pay those taxes. A reorganization of the business might be advisable to create different types of ownership for family members, and to make full use of legislated “discounts” in valuing the business for purposes of gifting and estate planning.
One point should be clear when it comes to financial planning for the small business owner: the do-it-yourself drive that helped you start your business will not serve you well when it comes to managing the many financial issues created by that business. This is where professional expertise often becomes necessary. Exercise your privileges as chief executive officer, and delegate these issues to qualified tax and financial planning professionals. Our advice can make all the difference in improving your chances of business success, and give you peace of mind that your family’s finances are secure, so you can focus on growing your business.
Estates and Intergenerational Planning
It is often said, that in life, two things are certain….death and taxes. An integral part of the financial planning process is mitigating risk and protecting assets, of which estate planning is an important element. Life does not always go to plan. While everyone would acknowledge this fact, few actually plan for the worst. “It’s all too morbid and difficult.”
The downside of failing to plan is that there is a very real risk that hard earned assets can be squandered, families are left with insufficient means to maintain lifestyle, or fall-out, and money handed to the Government that could otherwise have been distributed in accord with your wishes. If you own a business, then the stakes can be even higher.
Estate planning is simply identifying your assets and liabilities and what you want to happen to those assets if something happens to you. As part of that, you need to look at the issues that might arise and how best to manage them. All of this is then reviewed for tax outcomes and the legal requirements to provide the best care and protection for your beneficiaries.
If you are a business owner, there are also another set of issues to consider to ensure that the business can continue if you are not able to continue in your current role. Or, your beneficiaries can take their share of the value accumulated in the business. This planning will protect your beneficiaries, the business, and your business partners.
It’s also important to understand that actual wealth or the size of your estate is not the sole reason for estate planning. Estate planning is important for:
- The care and maintenance of minor children or children with disabilities.
- Marriage, de-facto relationships, separation or divorce.
- Managing the respective rights and expectations of beneficiaries, particularly in blended families.
- Managing estate liabilities and assets which may not be capable of immediate realisation or where value will be diluted by realisation.
- The transfer of assets through generations.
- Structures such as Trusts, companies, and complex business structures.
- Self Managed Superannuation, which has its own set of additional regulations.
Estate planning seeks to not only distribute the assets of your estate but do so in a way that protects the estate, addresses issues within the estate, and fulfils your wishes.
MSI Taylor Wealth Management will work with your trusted advisers including your Solicitor and Accountant to ensure that your estate plan reflects your intentions, and protects your lifestyle and financial plan, and continues to be adapted to changes that may occur in the future.