vendor passed away before settlement!
- Thread starter jsoe
- Start date
I knew of a lawyer who plans when he is about to die to rack large amounts of debt..
Just before you die get a massive cash-out on all your credit cards and squirrel the cash away.
i've got an idea for my first book and seminars. "how to live it up and die in debt" - does anyone have the number for the cancer council?
This is why living on equity is great.
Imagine, you have one property that you purchased for $1,000,000 and is now worth $5,000,000. You get diagnosed with advanced syphillis (which is what killed Nietzsche) and instantly borrow up to 80% LVR, with $3,000,000 cash out.
You spend this.
You die.
Your estate has a CGT bill of $2,000,000, but only assets of $1,000,000.
You pass control of your discretionary trusts to your children by making sure they are the next appointors.
Imagine, you have one property that you purchased for $1,000,000 and is now worth $5,000,000. You get diagnosed with advanced syphillis (which is what killed Nietzsche) and instantly borrow up to 80% LVR, with $3,000,000 cash out.
You spend this.
You die.
Your estate has a CGT bill of $2,000,000, but only assets of $1,000,000.
You pass control of your discretionary trusts to your children by making sure they are the next appointors.
Anyone know what happens in QLD in Ops predicament?
See the ops options 1 and 2.
Transfer cannot be completed until probate is granted.
Doesn't that mean your kids will go bankrupt?
Yes - bad idea.
A friend's mother passed suddenly and carried some CC debt at the time of death. Citibank are chasing him for the balance and he is now liable for the interest. He's been trying to fight it but in the meantime his credit file turned the darkest shade of black possible.
Every credit provider is different but it is all clearly outlined in their (often very long) terms and conditions. Read well before you sign.
Every credit provider is different but it is all clearly outlined in their (often very long) terms and conditions. Read well before you sign.
debt is not inherited. In Australia 3rd parties such as spouses or family are not liable for debt of another person unless they give a personal guarantee.
And there is this:
Creditors may bully you into paying up and making you think that it is your ?moral obligation? to pay off your parents? debt, but legally, there are only certain instances when debt can be inherited.
If you make efforts to pay off their debt using your own account even while your parents are still alive, creditors will get the impression that you are taking responsibility for their debt. So once your parents pass away, creditors will most likely come after you and hold you responsible for your parent?s outstanding debt.
Creditors may bully you into paying up and making you think that it is your ?moral obligation? to pay off your parents? debt, but legally, there are only certain instances when debt can be inherited.
If you make efforts to pay off their debt using your own account even while your parents are still alive, creditors will get the impression that you are taking responsibility for their debt. So once your parents pass away, creditors will most likely come after you and hold you responsible for your parent?s outstanding debt.
And if you outlive the $3mil? Ask the bank for more? Or return to work? Or ask the govt for a pension?
Your stuffed if that happens. You would need to know when you are likely to die to pull this one off.
As a lawyer I do not see how this is possible.
This doesn't mean a person is legally liable.
This actually happened, credit provider was Citibank and about 5-6 years ago.
Ok so riddle me this
If I have a heap of ips, let's say I have the option of putting them under my name or my elderly mother, which I have no siblings
If I'm trying to avoid cgt and "use"the system
Does that mean before I die, assuming I can service them, it's best to pull out as much equity, spend it, die, whilst the banks sell the 10-20% equity for me to get a 5m cgt bill which will die with me?
Or if by putting it in my mother's name, when she passes, and assuming she hasn't trefinanced, I would get them inheritance tax free? Or via a trust?
I don't understand the question.
If you die there is a final tax return done in the year of death and then the estate does the tax return for itself until the assets are passed.
If you die with a large portfolio and pass these on then the beneficiary won't pay CGT until those properties are sold. However you cannot pass on loans. So a beneficiary would have to apply to a bank to keep the loans at the same amount or the loans will need to be paid out by the estate or by the beneficiary. Depends on the terms of the will. Loans have no effect on CGT generally.
If your mum owned property and passed them onto you the tax would only be payable when they are sold. You will generally inherit her cost base, unless it was the main residence in which you will inherit the cost base at the time of death.
If the estate sold them then the estate would pay the CGT. If the debt is more than the assets of the estate then it will be insolvent. This doesn't fall into the hands of beneficiaries but stops there.
I have had a run in with Citibank's debt collectors (for clients) - I think I even made a complain about one of them once. Don't let them push you around.
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