inheritance, would this work?

ok so jenny has passed away leaving 600k in her super. theres no will it's going to probate

she has a kid jason who is a tradie and she had remarried to john (jason's stepdad) who is also a tradie.

ok so if the super goes straight to john (spouse) no tax is paid. so the idea is that 400k john would keep and 200k john would pay off jennys PPOR (which is only in her name) jenny's PPOR goes to jason. so he would get it tax free ideally. if the 200k went to jason straight from super it would be taxed at 30% and he'd loose 60k

the problem is by jason allowing the 600k super to go straight to john. john could just pocket it and run. so jason needs some type of security.

Q 1.) first of all is this so far legal? or is this tax avoidance?
Q 2.) because john is transferring 200k from him to jenny's (who is now deceased) PPOR would there be tax paid on that transfer? :S

ok so to give jason security over the 200k while john has it. could jason and john sign a Joint venture agreement for johns own PPOR? backed by a caveat on the property and a limited power of attorney over john for the property. and then have another agreement saying once the 200k is transferred in to jenny's PPOR the JV agreement over johns PPOR would then be void/ cancelled.

Q 3.) is there a better way jason could have security over the 200k while john had it?

i know this is quite bizare... but it's actually an idea my friend is currently thinking of because of her current situation.

any help would much much appreciated :)
 
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This story barely makes sense and I can't see what it has to do with tax at all.

What exactly is the problem, and who's problem is it?
 
Jenny can nominate who receives her super in the case of her death.

If her fund has anti detriment provisions then tax is nil or minimal regardless who receives it, around 1.5%.

Other assets will be distributed according to her will

I think an appointment with a solicitor will be well worthwhile.
Marg
 
Does Jennys Will specify all of this?
Who is the beneficiary of the super as lodged with the super fund? Does this contradict the Will
The executor could possibly allocate the money separately (pay off the bank first) prior to John pocketing it all. But essentially it all comes down to the Will.
 
Jenny can nominate who receives her super in the case of her death.

If her fund has anti detriment provisions then tax is nil or minimal regardless who receives it, around 1.5%.

Other assets will be distributed according to her will

I think an appointment with a solicitor will be well worthwhile.
Marg


she didn't have a will it's going to probate. sorry should have said.
 
Jenny can nominate who receives her super in the case of her death.

If her fund has anti detriment provisions then tax is nil or minimal regardless who receives it, around 1.5%.

Other assets will be distributed according to her will

I think an appointment with a solicitor will be well worthwhile.
Marg

i don't think she has this with her fund, about 90% sure.
 
This story barely makes sense and I can't see what it has to do with tax at all.

What exactly is the problem, and who's problem is it?

i agree i haven't done a great job of writing it i'm sorry for that.

if the 200k goes straight to jason he has to pay tax on it at 30% so 60k would go to the tax man. he doesn't want this to happen. so to get around this he wants the super to go to john (spouse) so no tax is paid and then for john to put the 200k into jennys PPOR

The idea being that once it's in the PPOR it'd be tax free once sold. 3 -6 months later.

New question. because john is transferring 200k from him to jenny's (who is now deceased) PPOR would there be tax paid on that transfer? :S
 
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If it's going to probate I assume that the public trustee is executor?
Surely the bank and all other creditors get paid by the estate before funds are distributed so there is no cash payment to jason just a house?
 
If it's going to probate I assume that the public trustee is executor?
Surely the bank and all other creditors get paid by the estate before funds are distributed so there is no cash payment to jason just a house?

there are 2 other siblings and the administrator of the estate will be the oldest sibling.

there are also more assets involved as well. i was just trying to figure out if there was a way i could save the 60k from going to the tax man. if the super goes straight to the estate it's taxed at 30%
 
there are 2 other siblings and the administrator of the estate will be the oldest sibling.

there are also more assets involved as well. i was just trying to figure out if there was a way i could save the 60k from going to the tax man. if the super goes straight to the estate it's taxed at 30%

Honestly, you are asking on a forum about this stuff??? :confused:

Get some legal advice. Pay for it. I'm guessing you want to get a "feel" for things before you seek that legal advice, but the answers you will get here are not going to help you (unless they come from the legal people).

Even then, they would need to know so much more than you've told to form any sort of opinion.
 
If you have NSW public trust involved get some good legal advice.
They will want to hold on to it as long as they can and you will be charged management fees
for them to look after the estate.
 
Honestly, you are asking on a forum about this stuff??? :confused:

Get some legal advice. Pay for it. I'm guessing you want to get a "feel" for things before you seek that legal advice, but the answers you will get here are not going to help you (unless they come from the legal people).

Even then, they would need to know so much more than you've told to form any sort of opinion.

Best advice. Here's my 2 cents worth:

ok so jenny has passed away leaving 600k in her super. theres no will it's going to probateCan't get a Probate without a Will. You may mean Letters of Administration upon an intestacy

she has a kid jason who is a tradie and she had remarried to john (jason's stepdad) who is also a tradie.

ok so if the super goes straight to john (spouse) no tax is paid.Super is not part of the estate- if it goes to tradie Jason he receives it as "dependent" which is favourable from a tax point of view-Jason should be making a claim on it though- as should tradie John so the idea is that 400k john would keep and 200k john would pay off jennys PPOR (which is only in her nameThe property can get transferred to the Administrator (once granted) and distributed in shares as per the rules of intestacy) jenny's PPOR goes to jason. so he would get it tax free ideally. if the 200k went to jason straight from super it would be taxed at 30% and he'd loose 60kCheck with an accountant on this but in the words of Joh I think that "You are wrong Jana. You are wrong wrong wrong".

the problem is by jason allowing the 600k super to go straight to john. john could just pocket it and run. Yep. So tradie Jason should be putting a claim in to the Super fund and the parties should be consenting to a distribution from the Super fund directly and not into the estate which may incur the increased tax liability-just sayinso jason needs some type of security.

Q 1.) first of all is this so far legal? or is this tax avoidance?
Q 2.) because john is transferring 200k from him to jenny's (who is now deceased) PPOR would there be tax paid on that transfer? :SI'm almost as confused as you are on this point as I have no idea WTF you are on about- Is Tradie John or Jason supposed to get the house.

ok so to give jason security over the 200k while john has it. could jason and john sign a Joint venture agreement for johns own PPOR? backed by a caveat on the property and a limited power of attorney over john for the property.Have you been to one of those Massland/Rolton seminars lately??? and then have another agreement saying once the 200k is transferred in to jenny's PPOR the JV agreement over johns PPOR would then be void/ cancelled.

Q 3.) is there a better way jason could have security over the 200k while john had it?

i know this is quite bizare... but it's actually an idea my friend OK- if your friend is the soon to be deceased Jenny then the advice is simple- go to a solicitor, get a Will drawn up and make some binding nominations with the Super fund. The end.is currently thinking of because of her current situation.

any help would much much appreciated :)
 
Honestly, you are asking on a forum about this stuff??? :confused:

Get some legal advice. Pay for it. I'm guessing you want to get a "feel" for things before you seek that legal advice, but the answers you will get here are not going to help you (unless they come from the legal people).

Even then, they would need to know so much more than you've told to form any sort of opinion.

yes i was concerned for my friend and thought maybe someone on here had some experience with this type of thing. she is speaking to a lawyer. i'm aware that i don't have all the information so it's hard to give accurate advice. i was only after some ideas. as you said to get a feel.
 
Best advice. Here's my 2 cents worth:


if the 200k went to jason straight from super it would be taxed at 30% and he'd loose 60kCheck with an accountant on this but in the words of Joh I think that "You are wrong Jana. You are wrong wrong wrong"

Super lump sum death benefits
This type of benefit is tax free if it is paid to a person who is a dependant. This can be paid as an income stream or a lump sum.
Maximum tax rate for lump sums paid to non-dependants
Taxed element of the benefit
15% plus Medicare levy
Untaxed element of the benefit
30% plus Medicare levy

he's a not dependant on her though? :S

https://www.ato.gov.au/Individuals/.../How-tax-applies-to-super-and-death-benefits/
 
If Jenny is still alive she should get legal advice. If gone already then som and husband should get separate legal advice.

strategies can be implemented pre or post death to save tax.
 
A person can do many things to ensure their super is received by someone.
- Binding death nomination
- Non-Binding death nomination
- Leave super to estate provided their will allows for this extra $

All have + and -. Get some financial advice and legal advice.

By the way - Probate is a court process. Nothing "goes to probate" as such. If a person dies without a will the estate is handled by the public trustee under law. Otherwise, on death a will may make someone the executor/s/trix etc. Probate is a process whereby the executor (Public Trustee if no will) is granted court approval to administer the estate. Until that time the Public Trustee is the guardian of the estate even if Joe Blow is nominated in the will. Probate allows the estate to be dealt with. Its NOT the process of administration of the estate.

Super is often dealt with the the super fund trustee and never makes the estate. So the will is meaningless...

There are many cases every year where a former spouse is given a death benefit from super. A binding death benefit may be needed to be revised. The tax impacts should be understood before acting.
 
By the way - Probate is a court process. Nothing "goes to probate" as such. If a person dies without a will the estate is handled by the public trustee under law. Otherwise, on death a will may make someone the executor/s/trix etc. Probate is a process whereby the executor (Public Trustee if no will) is granted court approval to administer the estate. Until that time the Public Trustee is the guardian of the estate even if Joe Blow is nominated in the will. Probate allows the estate to be dealt with. Its NOT the process of administration of the estate.

This is not so Paul.

If there is a will the executor can apply for Probate to be granted. If there is no will it doesn't mean that the Public Trustee will get probate or administer the estate but that someone, usually a family member, may apply to the court for Administration of the estate. This is similar to Probate in that the Administrator will then have authority to deal with the property of the deceased. A professional Trustee company coulld be appointed as executor or administrator.
 
We recently went through the probate process for my mum's will, as the bank required a probated will to release her money.

Probate simply "sets the will in stone" and not subject to challenge. Before probate is granted, public notices are issued which gives anyone 30 days to advise of any debt or notice of a possible interest in the estate. Any challenges are dealt with before probate is granted.

This meant the bank could pay out without fear if future problems.
Marg.
 
We recently went through the probate process for my mum's will, as the bank required a probated will to release her money.

Probate simply "sets the will in stone" and not subject to challenge. Before probate is granted, public notices are issued which gives anyone 30 days to advise of any debt or notice of a possible interest in the estate. Any challenges are dealt with before probate is granted.

This meant the bank could pay out without fear if future problems.
Marg.

Not so unfortunately. We had probate granted, and a week after the deadline for any challenge, we were hit with a challenge. Cost us $1M. Fighting it would have cost us probably that much but we would have paid lawyers instead of the challenger.

Probate and deadline meant nothing. Sucks.
 
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