Decide to take the first step and call us today 1300 LEGAL HELP

Blog

Our recent articles

Subscribe here for articles and podcasts on all the latest and most relevant legal issues. If you need some info for your SMSF, you’re being chased by a regulator or someone has slapped you with a law suit, there is something here than can help you get started. If you can't find your answer here, call us on 1300 LegalHelp and we will get an answer for you.


Not Just a Rinehart Problem

The NSW Supreme Court recently appointed Bianca Rinehart as trustee of the Hope Margaret Hancock Trust giving her control of the Trust which has an estimated value of $5 billion dollars. There may yet be more to come in the form of an appeal to the decision and Bianca’s brother declaring that “more action will be taken”.

On 28 May 2015, the New South Wales Supreme Court in the matter of Hancock v Rinehart [2015] NSWSC 646 appointed Bianca Rinehart as trustee of the Hope Margaret Hancock Trust giving her control of the Trust which has an estimated value of $5 billion dollars.

It was another chapter in the ongoing feud that has been publically played out and embroiled one of Australia’s richest families. There may yet be more to come in the form of an appeal to the decision and also Bianca’s brother declaring that “more action will be taken” referencing past actions of the former trustee – his mother Gina.

Whilst Gina Rinehart lost this battle and also previously the attempt to have the family feud in private, there is nothing like a high profile, well publicised saga to focus a client’s attention on their own estate planning affairs. While a typical client may not have the wealth or profile of Gina Rinehart, the estate planning issues highlighted in her family’s conflict are consistent with the issues clients try to avoid with good estate planning.

I have lost count of the number of times clients have raised the Rinehart matter in consultations and presentations. It is an excellent estate planning case study as it covers a number of issues which are important to a number of our clients, including family values, tax, asset protection and adequacy of executor or trustee.

Family Values

Like Gina Rinehart, who believes bankrupting her children could be good for their “personal development”, many clients have their own family values they would like to carry on through the generations. Family Values such as philanthropic endeavors, strong work ethic or family harmony are often built into the estate planning process and in some cases formalized and documented through Family Charters and Constitutions.

Tax

Death and taxes are important estate planning considerations not just in relation to family trusts but in transfer of assets from a deceased estate. With superannuation now a significant component of our client’s wealth, the taxation implications of the transfer of this wealth upon the death of a member also requires close attention. Capital Gains Tax attracting to the assets of the Hope Margaret Hancock Trust was an area of key focus in relation to the management of the Trust and the effect it would have on transfer of Trust assets to the beneficiaries.

Asset Protection

One of the biggest drivers for clients to have their estate planning in order is to protect the assets for their children and grandchildren. No parent wants to have the assets they have worked so hard to build up going out to spouses or ex-spouses of their children. This is constant across virtually all of our clients regardless of their wealth position.

Adequacy of executor/trustee

Appointing an appropriate executor and/or trustee for one’s estate and related existing trusts is one of the most important decisions in a client’s estate planning. It can help prevent potential conflict down the track and perhaps consideration from the outset when the Hope Margaret Hancock Trust was settled or at least upon Lang Hancock’s death, could have been given to building in some independence in the Trustee.

Regardless of one’s wealth there are important estate planning factors which are constant across all client’s circumstances. The Rinehart matter highlights the need to have proper estate planning advice.

For more information, contact David Patkin.

  • Share this article: