Support your family’s prosperity through generational wealth transfer

Your children—or grandchildren—deserve the best possible financial start. A head start in the property market, perhaps?

An Investment Bond gives you the option to invest on behalf of a child or a grandchild, niece, nephew, godchild, or any other young person who is important in your life.

You can continue to own the investment, or you can set a date when ownership automatically transfers to the child.

Forward-thinking and financially savvy parents—and grandparents—often use investment bonds to help set their children up for financial success.

Protect and transition the family wealth you’ve worked to build

Jenny and Miles have a 10-year-old son, Josh, and are already thinking about how to give him the best opportunity in life.

They have seen housing prices continue to rise and the cost of living explode. They worry that it will be hard for Josh to get ahead and set himself up financially when the time comes and want to do what they can to help.

Right now, their money is squeezed between paying for Josh’s schooling, paying off a mortgage and general living expenses.

They want to start a savings plan now to spread the load over many years, worried they won’t have any savings when the time comes. Their parents have told them they would also like to put some money aside for Josh’s future.

An investment bond can provide a better financial future for your child

An Investment Bond provided a way to save for Josh’s future.

• A 10-Year Investment Bond means you’re not tempted to use the money for other things.
• To protect the funds from misuse, Jenny and Miles kept the investment bond in their names but named their child Josh as the beneficiary.
• They could continue to contribute each year, but no more than 125% than the previous year.
• Josh’s grandparents could also contribute money to the fund.
• Jenny and Miles will benefit from not having to count any returns towards their taxable income. Especially important during the early years when they want to maximise government benefits.
• They could select a high-growth investment option, knowing that it would be many years before they wanted to touch the money.
• Although they were saving for Josh’s future, having the option to access the money in case of an emergency gave reassurance.
• Being able to transfer the ownership at any time meant Jenny and Miles had control over when the money ended up in their son Josh’s hands. This provides a safeguard in the event they’re concerned about how Josh would spend the money, or if they want to retain the money for longer.
• Because the tax is paid within the fund, after 10 years there will be no tax payable when they (or Josh) start to use it and it doesn’t count towards their taxable income.

Jenny and Miles were able to put an initial lump sum amount that Jenny’s parents had given them for Josh and planned to save a regular amount each year. They liked having the money separate from anything else because it would remove the temptation to reallocate the funds as time went by.

Both sets of grandparents were happy as they could continue to contribute if they wanted to.

This information is intended to be general in nature and was prepared without considering your personal objectives, financial situation or needs. Please consider the information contained in the Product Disclosure Statement and Target Market Determination before deciding to acquire the products. Please obtain independent professional advice from a qualified financial adviser, registered tax agent or lawyer before making any decisions. Past performance is not a reliable indicator of future investment returns. Tax laws may change in the future which may affect an investor’s tax outcomes. While all reasonable care has been taken in producing the information, to the extent permitted by law, Foresters Financial makes no representations and gives no warranties of any kind in respect of the accuracy or completeness of the information.

Financial services are provided by Foresters Financial Limited (ABN 27 087 648 842, AFS Licence No. 241421).