Mother must act to protect her legacy after daughter threatens to contest will at all costs
A PARENT should take steps to ensure an entitled brat doesn’t get an inheritance they don’t deserve. A charitable trust would be an option, writes Barefoot Investor.
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A PARENT should take steps to ensure an entitled brat doesn’t get an inheritance they don’t deserve. A charitable trust would be an option.
HELEN ASKS: I am a successful, elderly businesswoman. My business, which I started from scratch, is conservatively valued at $7 million. My problem is I have a daughter who wants all my money. I thought I could leave the business to the family, but apparently that’s not going to be the case. My daughter says she will challenge the will and just keep going until there is nothing left. What should I do?
BAREFOOT REPLIES: I see this quite a bit — “kidults” putting their lives on hold and waiting around for an inheritance they believe they’re entitled to. For no other reason than they are a member of the lucky sperm club. As a successful self-made woman, you’ll understand money doesn’t, in itself, make you any happier — it just magnifies the person you already are. In other words, your daughter won’t find happiness from the money you give her or that she tries to prise from you. Anyway, let me take off my tweed jacket, put down my pipe ... and pick up my calculator. If I were in your shoes, I’d do a few things: First, I’d sell your business. It’s your life’s work, so you’ll want to ensure your customers and staff are in safe hands. You should have the final say on who takes it over. If you leave it to your kids when you die, they’ll probably just flog it to the highest bidder. Second, I’d think about placing your assets into a trust, which will bypass your estate and with it any potential claims from your daughter. Third, I’d think deeply about the legacy you want to leave. Right now, at least part of your legacy will be your spoiled, entitled brats fighting over money they haven’t earned and don’t deserve. You know what I’d do? I’d pick a cause that your family believes in — funding a shelter for women fleeing domestic violence, granting wishes to kids with cancer, saving rare birds, whatever’s meaningful to you — and pour your millions into a charitable trust for that purpose. If you really want to help your family find happiness, teach them the power of generosity.
DRIVE A CAR BARGAIN
CHRIS ASKS: A friend of mine, who is in real estate and whose mum is an accountant, suggests it is more tax effective to buy a new car on a three-year finance deal with an agreed buyback figure than to drive a cheaper older car. My friend seemed to get a good tax return for her earnings due to this. Am I better off doing this than driving my older but almost fully owned car?
BAREFOOT REPLIES: What a load of rubbish. Car dealers and finance companies have come up with all sorts of marketing gimmicks to get you to buy brand-new cars, which fall in value by 30 per cent as soon as you drive them off the car lot. That’s on top of the finance cost, of course. You’ll always be better off buying a three-year-old car for cash, downloading the logbook app from the ATO, and claiming your expenses through your business. That’s what I do. Even better, small businesses can claim an accelerated depreciation of $20,000.
AGE IS NO BARRIER
ZOE ASKS: I am a 15-year-old aspiring artist who is interested in doing commissions for online customers. I am hardworking and passionate about art. Where should I start and how do I set up my own company? I have no idea how I am supposed to be paid online without giving away my bank details and possibly being scammed. What do you think?
BAREFOOT REPLIES: I think you’re fantastic. That’s what I think. I also think the lessons you’ll learn from setting up your business will be as valuable as any subject at school. For simplicity, I’d start off as a sole trader which allows you to use your individual tax file number. Once you’ve got that, sign up for an Australian business number with the tax office. Then set up a bank account with your business name — Zoe’s Picasso Productions or whatever you want. Then it’s time to set up a basic online store — via Shopify or PayPal — to accept payments. After all that, the real work begins: finding customers, working out your pricing, and building your brand. Good luck, and send me a link to your online shop when it’s up and running!
EASY WAY TO INVEST
TOM ASKS: I have been an avid reader of your column in the Herald Sun and have read your book back to front several times. With your inspiration, I paid off my $1.5 million dollar house last year at the age of 45. I have also been educating myself about investing — using the Acorns app to invest $5000 of my money. But do you think this app is any good?
BAREFOOT REPLIES: Well done, dude. The Acorns app is the investment equivalent of putting training wheels on a bike, with a bell and streamers on the handlebars. It collects loose change (like rounding up your purchases) from your account and invests it, or you can set it to regularly drag out small amounts as well. It then invests your money into exchange traded funds — charging an extra layer of fees to do so. It’s an easy way to invest, but I wouldn’t commit serious dough to it. That’d be as ridiculous as a 45-year-old man riding around on a bicycle with training wheels. For beginner investors, though, it’s an okay deal. But I’ll tell you what’s a stinker of a deal — an investment in Acorns itself. Acorns Australia have just released an “investment opportunity” for its young, inexperienced customers: the ability to buy shares in Acorns itself. They emailed their customers last week attempting to raise as much as $6 million in what Acorns’ own lawyers have described as a “highly speculative” and “highly illiquid” investment opportunity. Damn straight. Reading the prospectus, I note Acorns Australia generated a loss of $1.7 million in the 2016 financial year on skimpy revenue of $154,236. It’s a rolled-gold turd of a deal and you should steer clear. Don’t let them touch your nuts.
The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice
Originally published as Mother must act to protect her legacy after daughter threatens to contest will at all costs
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