CML Lawyers

Estate Planning Reviews

In a dynamic regulatory environment, regular reviews of your Wills, Family Trusts, Superannuation Death Benefit Nominations and Deeds and Powers of Attorney are vital to secure your affairs after loss of mental capacity or death.  If you have documents dated on or before 2020 or 2010, or if your personal circumstances have changed since you last updated your estate planning documents, you should get legal, tax and financial advice without delay.

 2010 – Family Trusts and Testamentary Trust Wills – Streaming

 In 2010 the High Court (in Bamford v Commissioner of Taxation (2010) 240 CLR 481) ruled that trustees must follow the definition of income a trust deed.  Tax experts now recommend that Wills or Family Trusts dated up to 2010 should be reviewed to ensure that the trusts permit “streaming” of income and capital.  Prior trusts generally did not have this express power, to determine what amounts will be treated as capital to determine the distributable income of the trust, without which distributable income will be treated by the ATO under ordinary trust law principles, possibly increasing the tax payable.

2020 – Penalty Stamp Duty and Land Tax for Trusts owning real estate – 2020 or before

In mid-2020 state governments started charging surcharge land tax and additional transfer stamp duty to residential property owned by a discretionary trust that has a beneficiary that is a “foreign person”.  These extra imposts can only be avoided by permanently excluding foreign persons as potential beneficiaries of the trust.  This requires a formal variation of the trust, whether it be in a Will or a Trust Deed.

 Superannuation Death Benefits and Self Managed Superannuation Funds (SMSFs)

On death the trustees of an SMSF (often spouses or family members) may have considerable discretion to decide who gets distributions on the death of a member.  Even if you have made a binding death benefit nomination, it may not be implemented as intended.  We wrote about this in 2022 – In a Bind to Get out of a Bind.   Expert tax advice is recommended at least annually and immediately if your circumstances change, as is expert asset protection advice, because death benefits might end up paying the deceased’s debts, or the surviving individual’s debts.

Says Peter McNamara 

 “There’s three certainties in life:  death and taxes – and procrastination about both.   We can help you with just one of these – but only if you contact us without delay.”

Contact Peter McNamara for more information.

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