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Have you ever been caught out in a family dispute over a last will and testament when a family member has passed away? Have you experienced the anguish of a random person in the family contesting a will? Have you seen your parents’ hard-earned money be gifted to someone else who only knew them for their final few years, a carer perhaps, the cat’s home, or someone that defrauded them?

Estates and wills are complex and definitely need an expert to draw them up well. However, have you thought of other ways to safeguard money that you may want to pass on to your kids or even grandkids?

Investment bonds are a great solution to many estate questions these days. Benefits include:

  • You can nominate a beneficiary and directing funds to this person or place are less likely to be challenged.
  • Beneficiary can be anyone, non-related party, company, or charity.
  • Can be set up in joint tenants or tenants in common, meaning this can be reverted to kids at age eighteen or a nominated age of your choice up to age twenty-five.
  • Can provide additional safety from bankruptcy.
  • Investment assets held for ten years and over are tax-free and tax-free on death, even to adult beneficiaries.
  • Can transfer ownership of a life insured without incurring a CGT event or stamp/transfer duty.
  • Can be held in a trust for extra security.
  • You can use the ability to transfer the asset by year ten to a lower tax earner and mitigate some tax.

Investment Bonds are great for people receiving money early in life and want to lock it away until later  but not as long as superannuation.

So if you are in your twenties, you can place this away for a home deposit in your thirties.

If you’re in your thirties, they are ideal for kids’ education savings for private high school.

If you’re in your forties, they are great for additional tax-effective retirement savings.

If you’re in your fifties or sixties, they are great for establishing funds for your grandchildren’s education.  Another use at this age, is to sweep additional unused income stream payments into them if you are unable to reinvest back into super once you’ve fully retired.  These are not assessed under asset and means tests.

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