In a previous article we wrote about Centrelink deeming income. In particular, the structure used to hold your assets can result in you being eligible for some Centrelink payments that you would not be eligible for if your assets are not structured correctly.
Most readers of this article will be either close to retirement or already there. Everybody will have different tax and financial needs but something everyone will have in common is protecting your assets no matter how big or little they are.
At a time where your loved ones want to grieve, they do not want to be worrying about where your will is and sorting out your finances. In addition, you have worked hard to amass what little or grand assets you have so don’t let them go to waste.
Prepaid Funerals
Whilst these are not a tax deduction they are also not classed as an asset by Centrelink. Therefore if you have some cash sitting around, prepaying for your funeral reduces the burden on family, locks in a price at today’s rates and reduces your assets with Centrelink potentially making you eligible for some further benefits.
Wills and super
Most people either do not have a will, or it is not up to date. Do you know where your will is? Remember your superannuation may not form part of your estate and as such you may need a binding death nomination within your super fund. Did you know that you can reduce the amount of estate taxes paid by ensuring the right person is the beneficiary of your super? This can apply to the rest of your assets too.
Access to bank accounts where only one signatory
Do you have a bank account where your spouse is not a signatory? Does that account get used to pay the bills? If so, your family could potentially have difficulty in paying your bills when the account is frozen once you are no longer there to access it. An enduring power of attorney can be put in place to avoid this issue.
SMSF
If you have a Self Managed Super Fund and you are individual trustees, your fund becomes non-complying upon the loss of one of the trustees. This can be avoided by having the executor of your estate step in but also through having a corporate trustee.
Insurance
Ensuring you are adequately covered and the right entity holds the insurance is vital.
Investment Properties
As per our previous article on deemed income, holding the property as an individual is generally the best way to go unless you are a property tycoon. However there are pros and cons of holding the property in a trust or a company. When to sell is another commonly asked question. Timing is very important when it comes to selling an asset that may have a capital gain as it makes a difference to the amount of tax you have to pay.
As you are reading this article you may be thinking of a number of questions. Give us a call for a free consultation to discuss these matters in more detail or alternatively sign up to our monthly email newsletter by providing us your email address. These monthly editions give advice, tips and up to date information on current and emerging laws.