General Estate Planning issues (Wills, PoA, AHDs)

[Buzzard]

In 3 days I reach my preservation age of 59.

I'm not sure I want access to my money early. Knowing me I'd blow most of it on status runs, mattress runs, golf and alcohol before I retire and the rest on gambling.

Allocated pensions and annuities were good once upon a time but think that boat's sunk.

So most of it you would waste, the rest you would gamble

 

[Pushka]

I think I've stressed the family. Apparently my son did a bit of googling about PMR after I told him. (An auto immune issue that severely restricts most movement) The weekend was the first time I had seen him since. He probably saw a bit of difference in the way I have to manage how I get up from the floor. I can still do it holding on to the baby but need to move to a safe place to get up. It will improve though.) And now I'm ensuring I have all the kids names and DOB for the wills etc. He knows he's getting a legal PofA soon. He's a little chastened.

 

[Buzzard]

So what happens in this scenario:
A couple has an investment property or two in joint names. One of them dies so the property transfers to the surviving spouse. Being an investment, what about CGT upon transfer? Then there is stamp duty. Depending upon how long the property(s) has been owned, there could easily be a million or two gain. How do you handle such an imposition? Sell?

 

[CaptJCool]

So what happens in this scenario:
A couple has an investment property or two in joint names. One of them dies so the property transfers to the surviving spouse. Being an investment, what about CGT upon transfer? Then there is stamp duty. Depending upon how long the property(s) has been owned, there could easily be a million or two gain. How do you handle such an imposition? Sell?

Would seem there’s no CGT At death

How CGT applies to inherited assets | Australian Taxation Office

How CGT applies when you sell an inherited asset, or it passes to a foreign resident, charity or super fund.

www.ato.gov.au

 

[Pushka]

So what happens in this scenario:
A couple has an investment property or two in joint names. One of them dies so the property transfers to the surviving spouse. Being an investment, what about CGT upon transfer? Then there is stamp duty. Depending upon how long the property(s) has been owned, there could easily be a million or two gain. How do you handle such an imposition? Sell?

Ownership simply transfers to the other person. It's not a true transfer to a third party. When they sell there will likely be CGT at the cost price of when it was jointly purchased by them.

 

[Brissy1]

Binding agreements cannot be challenged

Exactly, I really don't see the point of a non-binding nomination and letting the super fund decide where YOUR money goes.

But note there's 2 types of Binding Nomination. Lapsing and Non lapsing. A lapsing nomination expires , as specified by the fund after (usually) three years, whereas a non-lapsing nomination doesn't expire (unless you change or revoke it).
Lapsing nomination is like making a will that expires after 3 years, would you do that? Stupidity really but some funds don't give the option of specifying a non lapsing binding nomination. Hence an advantage of a SMSF.

My opinions only.

 

[Pushka]

Exactly, I really don't see the point of a non-binding nomination and letting the super fund decide where YOUR money goes.

But note there's 2 types of Binding Nomination. Lapsing and Non lapsing. A lapsing nomination expires , as specified by the fund after (usually) three years, whereas a non-lapsing nomination doesn't expire (unless you change or revoke it).
Lapsing nomination is like making a will that expires after 3 years, would you do that? Stupidity really but some funds don't give the option of specifying a non lapsing binding nomination. Hence an advantage of a SMSF.

My opinions only.

Yes we can only do a lapsing one. Why the heck super funds get to make these rules is astounding. We had an SMSF but after the global crisis crises while it did really well while we micromanaged, we simply lost the will to keep on track.

 

[JohnK]

So most of it you would waste, the rest you would gamble

LOL. Yes something along those lines.

Seriously though I'd love to leave it to my daughter but that's a lot of work.

 

[lovestotravel]

In 3 days I reach my preservation age of 59.

I'm not sure I want access to my money early. Knowing me I'd blow most of it on status runs, mattress runs, golf and alcohol before I retire and the rest on gambling.

Allocated pensions and annuities were good once upon a time but think that boat's sunk.

Nothing wrong with an allocated pension still, but depending where your money is invested and the current/prior returns not sure you would want to draw down too much at the moment

IMO DYOR

 

[Brissy1]

Yes we can only do a lapsing one. Why the heck super funds get to make these rules is astounding. We had an SMSF but after the global crisis crises while it did really well while we micromanaged, we simply lost the will to keep on track.

Eventually I'll probably close mine.
Did it take much time/effort/money?

 

[Pushka]

Eventually I'll probably close mine.
Did it take much time/effort/money?

I think it was more the accountant dragging his feet because he knew he was losing income. .

 

[love_the_life]

I have some of my super in a retirement fund so have a small income each month (not needed to live on really) - fund is still earning and ahead.
I also have a small savings super fund which super from my current job is paid into. I was also able to add some inheritance money but being over 70 the amount was limited.
We will be visiting the solicitor in the near future to revisit our wills as we had tried to write out a granddaughter who had cut all contact with her father. Things may be different now (and she has become he) and has made (after 15 years) contact again. It was a very complex situation at the time and we still need to protect our daughter's inheritance (grandchild is son's).

My parents had thought their wills meant that if one passed, the other got everything but it turned out (and they didn't really realise it at the time) that it was only the interest on the estate that the other would receive. Dad died in 1994 and my mother received interest on his estate/dividends until her death 2 years ago. It is meant that when she died, both estates had to be finalised. And that meant also paying out the final tax amounts on both. Family have received the main payout but waiting now for the small amount (and it is small) from the residual held for the ATO payments.

 

[JohnK]

Nothing wrong with an allocated pension still, but depending where your money is invested and the current/prior returns not sure you would want to draw down too much at the moment

IMO DYOR

Absolutely. If I'm working another 10 years I won't be touching anything. Plenty of time to research.

 

[Brissy1]

Not too fazed of doing the whole re-contribution creating tax cuts...

at the point of age eligibility for Comm seniors health care card, it’ll be a handy addition to prune taxable income to meet the income test

If you're referring to contributing $27500 (-15% contribution tax) to gain a $27500 tax deduction, nice but I don't think that will "prune taxable income to meet the income test"; that income test is "adjusted " taxable income.

Addendum... maybe I'm mistaken in relating those 2 bits of your post, if you're referring to another "pruning" method please please advise!

 

[Pushka]

I have some of my super in a retirement fund so have a small income each month (not needed to live on really) - fund is still earning and ahead.
I also have a small savings super fund which super from my current job is paid into. I was also able to add some inheritance money but being over 70 the amount was limited.
We will be visiting the solicitor in the near future to revisit our wills as we had tried to write out a granddaughter who had cut all contact with her father. Things may be different now (and she has become he) and has made (after 15 years) contact again. It was a very complex situation at the time and we still need to protect our daughter's inheritance (grandchild is son's).

My parents had thought their wills meant that if one passed, the other got everything but it turned out (and they didn't really realise it at the time) that it was only the interest on the estate that the other would receive. Dad died in 1994 and my mother received interest on his estate/dividends until her death 2 years ago. It is meant that when she died, both estates had to be finalised. And that meant also paying out the final tax amounts on both. Family have received the main payout but waiting now for the small amount (and it is small) from the residual held for the ATO payments.

One has to keep in touch with changes. We are taking a bit of a stand in ours, it's complicated as you might have guessed but that too might change. And grandchildren, or no grandchildren, complicate it. You really do need to have everything in your will justified especially if there are younger grandchildren at play which you may not be keen on. But you know that hey?

Did your parents not have all their assets in joint names or was their will not correctly written or differently written so it just wasn't handed over?

We don't plan on touching anything for a year or so so still in accumulation phase. If bank interest is worth it maybe a lump sum! Before the rules change.

 

[Pushka]

Is anyone else seriously considering withdrawing all their super as a lump sum and putting it in the Bank? Those over 65 or 60 and retired that is. We have a separate super fund that has a small life insurance policy.

 

[tgh]

Is anyone else seriously considering withdrawing all their super as a lump sum and putting it in the Bank?

NO.. why would anyone consider that course of action ?

 

[Hvr]

We have a separate super fund that has a small life insurance policy.

Do you really need an insurance policy?

 

[Pushka]

Do you really need an insurance policy?

We've had it in our super for years as you do with kids. Premiums of $1000 a year for $250k. Only looking at another what, 20 years if lucky so still cost effective.

Post automatically merged: Feb 21, 2023

Is anyone else seriously considering withdrawing all their super as a lump sum and putting it in the Bank?

NO.. why would anyone consider that course of action ?

Because i don't trust the Govt, any Govt, and i dislike the tax on inheritance with one child overseas. Given the rate of return maybe bank interest might be better anyway and we know we won't spend it away.

 

[tgh]

Because i don't trust the Govt, any Govt, and i dislike the tax on inheritance with one child overseas. Given the rate of return maybe bank interest might be better anyway and we know we won't spend it away.

I cannot find words to comment on this….