I have been following with interest the news reports over the family dispute between Gina Rinehart and three of her children, in relation to a dispute over a trust formed from the Estate of Gina Rinehart’s late father, Lang Hancock.
Lang Hancock left a large portion of his Estate in a trust for his grandchildren (Gina Rinehart’s children). Gina Rinehart is the trustee of the trust and it is alleged that the trust was to come to an end when the youngest daughter turned 25 in September 2011.
In Court documentation filed, the three children allege they discovered that their mother changed the vesting date of this trust until 2068, effectively delaying the date the children to receive the proceeds from the trust until that time.
The three children are now trying to remove their mother as trustee of the trust.
I am not familiar with the details of this case, and therefore I am not in a position to provide my opinion. This case however does highlight the necessity to have a very detailed estate plan, especially when assets are owned in structures such as trusts and companies.
It is essential to consider many different objectives when preparing your estate plan. These include:
1. Who will have the effective control of the entities that own your assets.
- If the asset is not in your own name, your estate plan should address who takes control of the assets, and when. This is highlighted in the current dispute in the Rinehart family. It is understood that the children were to receive approximately $1 billion each from the trust, and this has now been potentially delayed for a very long time;
2. Tax – Tax considerations, and the impact that your wishes have from a tax perspective, are very important factors that should be taken into account. It is important to work with an accountant and other advisors to ensure that your tax objectives are not breached in your estate plan;
3. Asset protection – It is important to take to consider personal circumstances of your beneficiaries and implement your estate plan to ensure that their assets, and assets of the estate are protected;
4. Financial support – It is very important to ensure that your spouse and children are properly supported from your estate, to avoid any potential claims;
5. Anticipating family disputes and battles for control – This is something that the late Lang Hancock may well have considered (I am not in a position to know what considerations were taken into account by him). By pre-empting and anticipating any potential family disputes, steps can be taken prior to death to minimise the risk of a dispute that could ultimately affect the value of the estate, and destroy family relationships;
6. Superannuation – It is important to consider what will happen to your superannuation benefits upon your death.
These are not all the considerations that need to be taken into account when formulating a strategy for your estate plan. By taking the time, and seeking appropriate advice, you can do everything in your power to reduce the risk of family dispute subsequent to your death. Often it will be the case that advice needs to be obtained from a lawyer, accountant and financial planner.
If you have any queries or any questions in relation to an estate dispute, estate planning or reducing the risk of a claim being made against your estate, please do not hesitate to contact me.