Investment bonds can be a cost effective, tax-effective and convenient way to pass on your wealth to your dependants and others, with minimal fuss. Investment bonds have unique features that can be used in conjunction with, or as an alternative to conventional estate planning tools - such as a will, a testamentary trust (for future gifting and for making intergenerational wealth transfers), and superannuation.
Depending on your personal circumstances and the types of assets you are wishing to distribute, an investment bond can be used to transfer wealth as a non-estate asset (outside of your will.) Where an investment bond has a nominated beneficiary or instructions are provided to transfer ownership on your passing, the investment bond has a number of benefits:
A testamentary trust may be established under a will to manage the transfer of wealth to beneficiaries. As an alternative to a testamentary trust, you can use an investment bond to plan ahead with peace of mind about how and when and to whom your estate’s wealth (or part of it) will be distributed to the next generation. An investment bond has a number of benefits compared to using a testamentary trust:
Investment bond beneficiary nomination features are similar to superannuation beneficiary arrangements to directly distribute death benefits and bypass your will and legal estate. The notable additional benefits include:
Planning how to transfer your assets to your loved ones can remove unnecessary stress and create certainty to ensure the right assets go to the right people, at the right time, with minimal fuss, expense, and inconvenience. Our comprehensive Estate Planning Guide helps you understand all the important considerations when structuring your estate plan and how investment bonds can help with your estate planning needs and offer more control and certainty when passing on your wealth.
When considering the right estate planning approach for each of your assets, we recommend consulting a financial adviser to make sure your current and future investments are structured to meet your estate planning objectives.