Selling a family asset: a case study

The situation

In 1995 Bob (47) and Jane (47)* were earning a good income from their  cattle property when Bob injured his neck in a work incident. Although  Bob was able to return to work he felt it would be best to sell the  property and pursue something less physical. Additionally, with three  independent children they wanted to explore their dreams of travel.

The solution
Bob and Jane received $2million net in the sale. Wanting to make the  right decisions with their life savings, they sort the guidance of Alman  Partners. After analysing Bob and Jane’s financial position, helping  them set goals for the future and understanding their personal values,  Alman Partners drafted a financial roadmap. This roadmap has allowed Bob  and Jane to enjoy life now and through retirement. Below are just a few  of its features:
  • A family trust was established with $1,100,000 to meet Bob and  Jane’s desire for the majority of the property proceeds to pass to the  next generation.
  • A further $250,000 was contributed to each of their superannuation  funds. A partial tax deduction for this contribution helped to reduce a  capital gain made from part of the property sale. As they had retained  sufficient funds outside superannuation, they could take advantage of  superannuation’s lower tax environment (15%).
  • At the time (1995), $400,000 was utilised to purchase a new and substantial home.
  • Bob obtained a 9 – 5 job on a salary of $60,000 and salary  sacrificed $25,000 of this to superannuation which reduced his taxable  income.

Bob and Jane’s investment strategy incorporated the three major asset  classes of shares, property and bonds with an emphasis on defensive  assets to dampen any volatility. This model put together by Alman  Partners allowed the couple to live on $100,000/ year plus inflation  which supported their everyday needs and travel dreams.

Life now

Bob and Jane are now aged 62 and retired and continue to enjoy their  time together travelling. As Bob explains, “From a personal perspective  we were really nervous about the changes we were making to our life and  worried how it would impact us financially in the future. Alman  Partners’ professionalism has put our financial house in order and have  kept it that way, giving us peace of mind.”

*Names have been changed to protect the individuals’ identity.