News Updates
AS IT HAPPENS
The Financial Planner carefully structures Mary’s affairs.
Mary receives a $1 pension and Concession Card. But then, Mary’s mother dies.
Mum’s Will leaves everything to Mary. The inheritance costs Mary her $1 pension and Concession Card. Mary has money from her superannuation. She doesn’t want the inheritance. Mary desperately renounces the gifts under the Will. Mary’s children get the inheritance instead.
Does Mary keep her Centrelink Benefits?
Sadly, no. Centrelink deems monies abandoned or given away still yours for the next five years.
The two exceptions:
Gifts above $10,000 are ‘deprived assets’. ‘Deprived assets’ are given away but still deemed yours for the next five years. Sure, Mary can abandon the gifts under her Mum’s Will. However, Centrelink deems the gifts still hers for the next five years.
So what can you do?
Let’s pretend Mary’s mother is still alive. There are many strategies available to them. For example, an Accountant or Financial Planner can go on a legal website (we recommend Legal Consolidated - www.legalconsolidated.com.au) and easily build a 3-Generation Testamentary Trust Will.
The 3-Generation Testamentary Trust Will names Mary and her children as beneficiaries. The 3-Generation Testamentary Trust is flexible. Each beneficiary can receive a portion or none of the estate.
Mary then successfully retains her $1 pension and all-important Concession Card.
Companies and Family Trusts would require a slightly different approach.
Rick Maggi
Ok, so you've planned for retirement, you have insurances in place, your Wills are up to date, and you've appointed Enduring Powers of Attorney. You couldn't be more organised - well done!
But do your loved ones know where your Will is located? How about your insurance and superannuation documents? Do they know who your Lawyer, Financial Advisor and Accountant's are? How about that key to the safe or special filing cabinet?
You can see where I'm going with this.
An 'Estate Directory' is a simple but extremely useful document to have in times of crisis. Basically, it's a list of important contacts and the location of documents that you can give to your next of kin, leave in an obvious place, or lodge with us, your Financial Advisor.
Don't let your well considered plans unravel at the worst possible time. If you're a client of Westmount, ask for an Estate Directory today (it's free).
Rick Maggi
“On numerous occasions when dealing with so-called homemade Wills, I have observed they are a curse. Homemade Wills which utilise what is sometimes known as a ‘Will kit’ are not much better. This case proves the point….”
Master Sanderson, Rogers v Rogers Young [2016] WASC 208
Kathleen Rogers loved her daughter, Alexandra. Mum’s Will left everything to her. Mum died of cancer when Alexandra was not yet 18. The Estate was intended to be held on trust until Alexandra was 25. Unfortunately, mum’s newsagency Will kit did not agree. The Will was ambiguous as to what ’25 years of age’ meant.
The penny dreadful Will kit cost the daughter $200,000: $100,000 to attack a Will and $100,000 to defend. It’s paid by the estate, so 18 year old Alexandra lost out here. Mum could have gone to our law firm’s website and built a professional Will for a mere few hundred dollars.
