When we think about estate planning we often believe that if we have prepared a will then we have done enough, or at the very least we have done something!
Death itself does not create a tax liability, however what happens to the assets after you die could result in a tax bill. Creating a will or becoming a beneficiary of one may appear to be more straight than you thought, but the reality is the tax man could take a large bite out of your estate or inheritance.
Estate planning is not just about making a will. It’s about deciding how you want to be looked after (both medically and financially) if you can’t make your own decisions later in life. It’s also about documenting how you want your assets to be distributed after you die
Long gone are the days of preparing a will and locking it away in the safe or bottom drawer! Whether it be at the completion of this years’ tax return, or when you change the batteries in the smoke detector, every year you should dust off your estate plan and update it for the inevitable changes that most likely will be needed.
From 1 July 2016 Australian residents selling real estate with a market value of $2 million or more will need to apply for a clearance certificate from the Australian Taxation Office to ensure that 10% is not withheld from the sale proceeds.
Let’s face it: no-one likes to think of death, especially their own. It’s not exactly a great conversation starter, is it? This might explain why so many people end up “dying Intestate” which means they die without a will and, as a consequence, have their assets distributed according to State law.
Sadly, the way State law distributes a deceased person’s assets among family members can often be a lot different to the way a deceased person wanted their assets distributed.