The report consists of a case scenario which deals with the subject of accounting and financial planning. The name of the two clients in this respect is Jim and Sandra Jones. A brief scenario of the position of Jim and Sandra is being discussed in this case. The summary of the situation of the client is also assessed in this case which includes the current financial position, relevant issues and their goals. Additionally, the investment risk profile of the company has also been analysed. Lastly, the recommendations for superannuation and estate planning are also addressed and different methods are being stated for the purpose of addressing the goals of the company.
After critically evaluating the different scenarios of the study, some of the questions and its relevant answers are discussed as under:
Under this particular circumstance, Robert who is the son of the couple Jim and Sandra should not be given any type of financial and monetary assistance or any kind of gifts. Robert has been facing problems regarding his marriage and is on the verge of having a divorce. However, his parents decided to gift Robert a sum of $50000 that is used as a deposit on a house. Now, if Robert faces divorce, he has to bear a huge compensation. Thus, in this light of the study, Robert should not be given any type of gifts.
Yes, Jim should claim the benefit nomination
iii) Should Sandra and her wife have appointed each other as their respective general power of attorney?
Yes, Sandra and her wife should be appointed as their respective power of attorney
Rosslyn should not be involved in any type of marriage fights that can cause a problem regarding the current valuation of market and property (Cucchiella et al. 2015).
As per the review of the case scenario that is illustrated in the study, Jim and Sandra Jones are having three children and both are employed. However, there was certain financial distress that is being faced by the couple for which they had to part ways. Some of the assets that are possessed by the couple and are determined at the market value rate are as under:
iii) Life Insurance policy that is worth $950000
Moreover, the different assets that are possessed by the couple are owned on a joint basis by both Jim and Sandra. On the other hand, the life insurance policy is mainly owned by Sandra. Again, the business that is owned by Jim along with the different fixed assets is also owned within a family trust. Here, it can be said that both the couples are the trustees of the trustee company. The superannuation fund of Sandra has also contained the TPD policy (Calcagno and Monticone, 2015). In addition to this, both the couples Jim and Sandra have appointed each other as their power of attorney respectively. Furthermore, Jim and Sandra have also appointed their son as their legal hierarchy which evaluates the fact that their son will get the property after their death (Cummings, 2016).
Thus, the major goals of the client in this particular aspect of the study are:
A risk profile is said to be a quantitative analysis which consists of different types of threats that an organization faces. The main goal of a risk profile is to effectively provide a different non-subjective understanding of risks by providing different numerical values and representing different the different types of threats that come into consideration (Parameshwari and Krishnan, 2015). In taking this understanding to the study it can be said that investment risk analysis is low for Jim due to his age. Investing in a risk profile requires at least 5-10 years of waiting which may consider being hard in context of Jim. Sandra Owens insurance policy of Jim as his business and land and building both are owned within family trust. It can also be seen that Angela established a business 3 years ago with capital of $180,000 and does not contain any further claim on Jim’s estate. Additionally, the investment risk profile of the company has also been analyzed. Under Australian Securities and Investments Commission (ASIC), the recommendations for superannuation and estate planning are also addressed and different methods are being stated for the purpose of addressing the goals of the company. However, it can also be said that Jim is not at its best which it comes to his health as almost every family members his father, uncle and elder brother suffered heart attack. In this context it may be said as well that Jim’s risk taking profile will be low as he is also in his early 50s. This may need to be the duty of the person to take proper risk and maintain the performance to the point. This must need to be worked out in a proper manner. Jim completed a binding death benefit nomination in leaving an entire super to Sandra. As per the study it was also seen that the risk taking ability of Jim is much lower than everyone in his family (Pakpahan & Butler, 2018). Under Corporation Act 2001, Jim must need to process of findings in the optimal level of investment risk and consider the risk required, capacity of risk and risk tolerance through which the person would be able to afford to take risk tolerance in considering to the level of risk that will be comfortable for the individual (Redon et al. 2018). In taking this concept in a general manner to earn higher return Jim must need to take greater risk. The bond market is no exception in this consideration as most of the bonds pay investors a proper and fixed rate of interest income which will also be backed up with promist of few risk analysis (Channon and Jalland, 2016).
Superannuation provides a significant proportion of the wealth as when it completes it will be considered as the primary source of asset (Allgood and Walstad, 2016). In considering this with the study it can be seen that Jim’s superannuation account is recorded as $60,000 and on the other hand land and building used in the conduction of business had been recorded as $550,000. The advantage of this superannuation benefits on the assets can be paid directly to the superannuation fund. This can also be said that the superannuation benefits may not be able to form a part under deceased estate and is also subjected to the rules that comes under superannuation planning (Xiao et al. 2017). Under Corporation Act 2001, in reviewing the superannuation rules in necessary to distribute and establish the efficiency that will be required in taking the consideration of the benefits earned (Lusardi et al. 2017). In considering to the case the different issues that consisted of a business that had been established was provided to Angela in $180,000 for 3 years and on the basis of which no further claims on Jim’s estate was provided. Sandra’s individual superannuation contained $150,000 and had been decided to retain the account to preserve the insurance policy in a proper manner (Sharma, Singh and Awasthi, 2017). The main advantage under assets can be paid in a direct manner under superannuation fund. The different superannuation dependents over benefits are as follows:
In this context if Jim would prefer to take in the superannuation benefits in order to pay someone with the benefit (Nobre and Grable, 2015). All the beneficiaries can be received after death in a direct manner and will allow the under superannuation to take a lump sum amount of money into consideration (Peiros & Smyth, 2017).
Conclusion
As per the above study it was said that a 12 year old industry had been experiencing financial deficiencies and it was the duty of the financial planner to plan the benefits that may come in context of Jim and Sandra. Resources had been provided which provides a proper elaboration on the performance that had lead to the elaboration of superannuation and estate planning performance for the couple.
References
Allgood, S. and Walstad, W.B., 2016. The effects of perceived and actual financial literacy on financial behaviors. Economic inquiry, 54(1), pp.675-697.
Pakpahan, C., & Butler, D. (2018). Superannuation: Proposed SG amnesty raises opportunities and risks. Taxation in Australia, 53(1), 36.
Peiros, K., & Smyth, C. (2017). Cryonics wreaking havoc with estate planning. Taxation in Australia, 52(2), 96.
Calcagno, R. and Monticone, C., 2015. Financial literacy and the demand for financial advice. Journal of Banking & Finance, 50, pp.363-380.
Channon, D.F. and Jalland, M., 2016. Multinational strategic planning. Springer.
Cucchiella, F., D’Adamo, I. and Gastaldi, M., 2015. Financial analysis for investment and policy decisions in the renewable energy sector. Clean Technologies and Environmental Policy, 17(4), pp.887-904.
Cummings, J.R., 2016. Effect of fund size on the performance of Australian superannuation funds. Accounting & Finance, 56(3), pp.695-725.
Lusardi, A., Samek, A., Kapteyn, A., Glinert, L., Hung, A. and Heinberg, A., 2017. Visual tools and narratives: New ways to improve financial literacy. Journal of Pension Economics & Finance, 16(3), pp.297-323.
Nobre, L.H.N. and Grable, J.E., 2015. The role of risk profiles and risk tolerance in shaping client investment decisions. Journal of Financial Service Professionals, 69(3), pp.18-21.
Parameshwari, P. and Krishnan, J., 2015. Personality traits and risk profile influencing attitude of investor. Paripex—Indian Journal of Research, 4(9), pp.86-89.
Redon, P., Facchetti, R., Maloberti, A., Bombelli, M., Redon, J., Lurbe, E., Mancia, G. and Grassi, G., 2018. Relationships Between Serum Uric Acid And Blood Pressure, Metabolic Variables And Cardiovascular Risk Profile In Treated Hypertensive Patients From Central And Eastern European Countries: Results Of The Bp-care Study. Journal of Hypertension, 36, p.e2.
Sharma, G., Singh, T. and Awasthi, S., 2017. Determinants of Investment Decision Making: An Empirical Study. International Journal of Financial Management, 7(4).
Xiao, E., Chen, Q., Goldman, A.L., Tan, H.Y., Healy, K., Zoltick, B., Das, S., Kolachana, B., Callicott, J.H., Dickinson, D. and Berman, K.F., 2017. Late-Onset Alzheimer’s Disease Polygenic Risk Profile Score Predicts Hippocampal Function. Biological Psychiatry: Cognitive Neuroscience and Neuroimaging, 2(8), pp.673-679.
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