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Planning to make your money live forever

“A man’s dying is more the survivors’ affair than his own.” – Thomas Mann

“The beginnings and endings of all human undertakings are untidy.” – John Galsworthy

While these quotations from Mann and Galsworthy are usually correct, it doesn’t have to be that way. Surely an important part of anyone’s life is deciding what happens to their assets when they die. It never ceases to amaze me how little thought people put into estate planning and creating a lasting legacy. It’s bad enough that an estimated 45% of Australians do not have a valid will, and most have not made a binding death nomination for their superannuation. But how many people put even a fraction of the time into deciding what should happen with their money as they do in accumulating it in the first place? Neat clichés like ‘the dead don’t care’ do not resonate with me – perhaps that is just the forward planner in me and I may be an outlier.

Putting aside your religious beliefs, let’s assume you have departed this world and you are looking down from the heavens on the distribution of your hard-earned money to your loved ones. As Shakespeare wrote in Hamlet, “What dreams may come, when we have shuffled off this mortal coil, must give us pause.” The children are squabbling over whether to sell the family home, there’s a stepson you hardly knew claiming his rights, and your spouse has met a new partner with five screaming kids from a previous marriage. Your sister says you told her you would always support your siblings, and there are family members in your old house grabbing your stuff while they can.

You think you’re in heaven and you’ve gone to hell!

Address the basics

In thinking about estate planning, I believe it is essential that the following basics are covered while you are alive and have your marbles intact:

  • Make sure your wishes are clear, unambiguous and in writing. Written instructions usually mean a will, but in addition to this I like to have a one to two page ‘plain English’ summary (that your solicitor should tick for consistency with the will) to ensure there is no misunderstanding.


  • Ensure you cater for all situations, such as if you die, your partner dies, you both die together, providing for the children’s needs if they are under 18 (such as who will look after them and whether the carer should be paid).


  • ‘Complete the package’ and ensure you have an Enduring Power of Attorney (for money/finance decisions) and Enduring Guardian (for health decisions) appointed as well as having a documented Advance Care Plan (dealing with resuscitation, organ donation, and where you wish to be cared for when the time for natural dying comes).


  • Ideally, discuss your intentions with your family, so they have a chance to contribute and understand before you are no longer there to influence.


  • Develop a strategy that ensures your estate is well-managed by people you trust who know what to do with wealth.

Beyond these basics, I want to focus on the possibility of both creating a multi-generational legacy and enjoying giving while you’re alive.

Create a fund for future generations

It’s natural to care for your own children and grandchildren who you know and cherish while you are alive. But what about their children? What can you do that might also benefit future generations of your descendants?

If your resources are sufficient, one idea is to establish a trust that has the purpose of meeting particular costs of your direct descendants (being your children, your children’s children, their children and so on). The costs that come to mind are what I think of as ‘must have safety-net costs’ such as medical insurance, trauma insurance, school education and tertiary education. Plan for only 50% of the tertiary education costs so the recipient has ‘skin in the game’ and an incentive to complete the chosen study.

Imagine the satisfaction of knowing that whatever happens to the family finances, your great grandchild can be confident of a good education and decent health. Who knows what the future brings, as many a family fortune has been destroyed by poor investing or wasteful spending. With Australia facing decades of increasing budget deficits, both health and education expenditure will be targets. We may head more down the US path of user pays and denial of services. While it is hard to estimate what future school, university and hospital costs may be, it’s highly likely to be much higher than today.

The trust should have independent trustees and avail itself of investing expertise, so the money lasts as long as possible into future lifetimes (and who knows, future descendants themselves may end up having the means to contribute to the trust so that it lasts longer). In practical terms, any descendant wishing to have such costs met would apply to the trustees. You could even ‘force’ another gift on them (one that I am passionate about) and insist that any recipient must first complete a basic course in financial literacy before they are eligible to participate in the trust.

Imagine the day your daughter’s grandchild graduates from university to become a doctor and makes a toast to you (long past!) for helping to make the event possible through vision and generosity.

Help your children while you’re alive

If you started having children at 30 and you live until you’re 90, chances are your children will be retired when they inherit your estate. If they’ve done well already, they probably don’t even need the money, and all you are doing is giving more money to an already financially secure person.

If you live in the crazy property markets of the east coast of Australia, and your children are of a mind that they would like to live in a similar location when they leave home (and perhaps be near you), then it is likely that they will struggle to buy their first home given the prohibitive entry level to now get into the property market. So assuming your own financial needs are met, what better way to help your children than to assist them with their first purchase. Consider gifting the deposit or some type of interest free loan so the capital can one day be recycled again or protected in situations of divorce.

Leave an enduring gift to society

Buffett once said in his letter to the Gates Foundation: 'I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.'  I am a big fan of this quote.

Again, if your resources are sufficient, once you have provided for your family, to me there is no better way to leave an enduring gift to society than to set up a Private Ancillary Fund or establish a sub-fund with a Public Ancillary Fund.  Any money put into such vehicles is fully tax deductible.  The money is invested within the ancillary fund (which is a tax free environment) and from there a minimum of around 5% per annum of your account balance must be donated to charity. Your investment in the fund can last for many years, spinning off a never-ending stream of donations for charity.

[I’ll declare an interest here, as I am the founder and Chairman of Australian Philanthropic Services, a not-for-profit organisation that specialises in setting up and administering such vehicles.]

It was not until I reached the age of around 50 that the thought of mortality really entered into my thinking. Perhaps this was from watching my own parents age (and one of them recently passing away). That realisation comes with greater attention to how I can help people while I am alive and after I cross that great try line in the sky!


Chris Cuffe is co-founder of Cuffelinks; Portfolio Manager of the charitable trust Third Link Growth Fund; Chairman of Unisuper and Chairman of Australian Philanthropic Services. The views expressed are his own and they are not personal financial advice.


Death and taxes on your own terms

Estate planning and your wishes after death

Don’t leave your estate to clean up a super mess



March 17, 2015

What a refreshing article. In my case Chris, you are preaching to the converted.

However, many if not most never give their estate or even their old age any thought and leave it to others to sort out the mess or provide support.

You quote Buffett. After the birth of his first child Gates was asked how much he would leave to the child in his will and he said "maybe ten million dollars?" And if you don't leave your estate to your children, consider the grandchildren instead.

Most of all do your sums and work out whether you may not want to execute your own will and leave your estate to whoever before rather than after you die.


January 10, 2019

I know of a case whereby the grandchildren were the beneficiaries of a significant income stream from an early age which effectively usurped the parents ability to be parents to their children, causing some major issues as their children had become financially independent and when push came to shove the parent had no control of their children .... even the best intentions have unintended consequences ....

Roewen Wishart

March 17, 2015

Many people get a lot of satisfaction from creating a Private Ancillary Fund or sub-fund during their lifetime to involve their adult children and eventually grand-children. Then an appropriate addition can be made via a will. An added benefit- one's family knows in detail in advance how the charitable part of the estate will be used. Result - much less risk of toxic disputes which generate work for lawyers and unhappiness for everyone else.

David Rae

March 16, 2015

Highlights some of the key issues to be considered with estate planning. As people live longer there really should be deeper consideration given to how assets of an estate will flow and for what purpose.


March 16, 2015

Putting aside the stupid eschatological beliefs that I don't have [!] : let the human vultures deprave themselves - at their own expense - when I'm dead : )

Jonathan Hoyle

March 15, 2015

Hi Chris,

A good thought re establishing an education fund to circumvent profligate descendants.

The Buffet comment is spot on but the will of Quincy Bigger is even more to the point,

'I leave my cousin, Irving, the sum of one dollar and I wish absolutely that he not get a penny more under my Will. He has been responsible for me death and God will punish him. If he fights this Will in any way, I shall always haunt him and do everything possible to scare him.'

Rob Prugue

March 13, 2015

Thank you. Truly enjoyed this read.

"It's more difficult to give away money intelligently, than to earn it in the first place."
- Andrew Carnegie

Peter Dawson

March 13, 2015

Hi Chris,
I've been thinking of creating a education trust for some time and the health component you suggest is a great addition.
Do you know of or can recommend a Trust arrangement I can model from. I can imagine many pitfalls (what is education - a visit to the Dalai Lama, a course on Renaissance artists) and similar to health. I guess that will have to be defined for the Trustee to help determine support for the proposal. After all the descendants may have the full moral compass as we may hope.

Sean Churchward

March 13, 2015

Great thought-provoking article.


January 10, 2019

Great idea and nicely explained. It can't really last forever though unless you set the trust up in South Australia where they have abolished the trust perpetuity rule.


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