Case Study Series Two

True Peace of Mind



Tom was at his high school reunion where he got drunk on warm beer and camaraderie. While attempting his best daggy dance, Tom fell down some stairs breaking his neck. Thankfully for his family, the shock and grief caused by his unfortunate and foolhardy death was not his final legacy to them. His final legacy was in fact born three years before his death when he and his wife Mary took the necessary and responsible step of   seeking professional financial advice. 


Unlike the previous case study series which looked at the terrible results of a family who relied on no financial or estate planning advice, in this new case study series we will explore the positive benefits that professional financial and modern estate planning advice can provide family members following the death of a loved one. This is a sad story that has a positive ending …Tom’s daggy dancing death notwithstanding.


The Circumstances


  • Tom, 52, is co-owner of a profitable chain of pool shops with his brother Bill. 

  • Mary, 48, part-time online retailer, charity worker and mother.

  • Tom and Mary have three children Jack 23, Jane 20, Susan 18.

  • Jack and Jane are at university, while Susan is working part-time.

  • Tom and Mary have two properties, one in Sydney and one in Mary’s hometown in LA.


Issue 2: Funding Your Estate With Life Insurance


Before meeting with their financial adviser, Tom and Mary were not overly worried about their wealth. Tom’s business was making good money that easily covered the family’s two mortgages in Australia and US totalling $800,000. Both Tom and Mary were in great health and looking forward to the future. However, they had questions about their superannuation and whether or not they were doing everything they could to maximise the success of their business. In terms of life insurance, Tom had $200,000 coverage while Mary had none.


Their financial adviser quickly pointed out to them that he felt that they needed more life insurance, and that the Wills they had, provided by a local solicitor, may not provide them with the asset protection, tax minimisation and dispute avoidance advantages that parents in their prosperous financial position should have.


Tom and Mary had always been somewhat hesitant about life insurance, and told their adviser that they would consider it after some discussion. However, the adviser made more ground when discussing what could happen to their children’s inheritance if they continued to rely on the simple 2- 3 page Wills. After viewing The Convenient Truth presentation on Wills, Tom and Mary agreed to have a free initial meeting with RetireLaw solicitor Dawn Wong to investigate what could be done. Their financial adviser organised the meeting for them at his office so that he could be present.


Without prejudice, Dawn quickly realised that Tom and Mary’s estate was underfunded due to a lack of life insurance, particularly in the case of Mary who had none. Even if it was Tom who passed away first, his life insurance payout would only cover 25% of their current mortgages, leaving Mary with little ability to maintain her family’s current assets and standard of living.


Dawn pointed out what their financial adviser had already explained. Tom’s income alone could afford* to pay premiums for significantly increased policies for both Mary and him. Thinking about their wealth in terms of funding an estate that could provide for each other and their children should one of them pass away gave Tom and Mary a new perspective on the importance of life insurance, especially given their level of debt and the reality that their business income provided over 85% of total family income.


Fast-forward three years and Tom has passed away in a freak Macarena accident, while Mary is dealing with three distraught children and her own emotions. Thanks to their modern estate planning Wills, which include business succession planning provisions, Mary has the direction and security allowing her to take her time to decide (in consultation with her financial adviser and accountant) what should be done with Tom’s business interest to maximise its benefit to her and her three children moving forward.


However, it is the $1.5 million dollar life insurance payout (protected and maximised in Mary’s testamentary trust) that quickly allows Mary to manage their assets and maintain their standard of living during what is the most difficult time in their lives. While Tom and Mary were initially sceptical about the cost and importance of having prudent financial advice and modern estate planning documentation, given their business success, the results following Tom’s death ultimately spoke for themselves.


*Increasing the life insurance component of your superannuation can also be an affordable and effective alternative solution. Speak to your financial adviser to learn more.

This short three part case study series changes angles to look at what is possible for families and business owners with the right professional estate planning advice.





Funding Your Estate With Life Insurance

From 'Dying To Get Her Message Across'

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