It is a very common practice for a self-managed superannuation fund (SMSF) to purchase a life insurance policy where the purchase is pursuant to a business buy-sell agreement the member has entered into with their business partners. However, the Tax Office has stated that they believe this common practice is now a breach of the legislation. In ATO ID … Read More

Update your Will

  As you will know from past S&W Insights, we often recommend that you update your Will. This needs to be done on a regular basis as your circumstances change. Bill Stanley’s mother-in-law died recently at 93 years of age, after 3 years in a nursing home with dementia. Fortunately the family had taken our advice, and her Will had … Read More

Relationship breakdown – tax trap

A relationship breakdown can be emotionally and financially traumatic as assets are divided and property settlements negotiated. Even where a split is amicable there can be difficulties agreeing on how to apportion the assets, especially when some of those assets are owned by a family company. The Australian Tax Office’s (ATO) previous position was that the payment of cash, or … Read More

Binding Death Benefit Nominations

Your superannuation is generally one of your biggest investment assets. It comes as a surprise to many that its distribution is not determined by your Will. Instead, it is distributed by your Superannuation Fund’s trustee in accordance with the Fund’s rules. A Binding Death Benefit Nomination (“BDBN”) is one of the ways you can ensure that the trustee distributes your … Read More

Retirement planning

There’s a thought provoking TED talk by psychologist Daniel Goldstein titled “The battle between your present and future self”.  If you haven’t seen it, you should find a spare 16 minutes and watch it.  A big part of the presentation is about the balance between your current and future living standards.  That is, if you spend too much now, you … Read More

Saving tax on superannuation upon death

Binding Death Benefit nominations are necessary to avoid tax on that part of your super which came from tax deductible contributions and income thereon while being accumulated. During your lifetime, those in pension mode and 60 or over receive all their pension or lump sum payments tax free. On death the reversionary pension or lump sum payout goes tax free … Read More

Testamentary trusts – what are they?

A “testamentary trust” is a trust created in your will, which only comes into existence upon your death. Your will needs to clearly summarise the rules of the” testamentary trust” that you are creating and for this reason it is imperative that a solicitor be used to draft your will. Testamentary trusts created by wills can be very powerful estate … Read More