Pre-death withdrawal strategies need careful consideration

Steven Jell smsf


In a recent article, Steven Jell, senior associate at Cooper Grace Ward Lawyers, said there may be different tax treatment depending on whether a retirement annuity payment is a member benefit or a death benefit. said.

“For example, people aged 65 and over can take advantage of their retirement pension tax-free. can occur,” he explained.

Gel said most people want to remain in the superannuation environment for as long as possible because of the tax benefits offered through superannuation.

“But if left too long and the retirement fund remains eligible at the time of the individual’s death, there could be taxes payable when those amounts leave the retirement fund,” he said. Stated.

That is why some members want to withdraw their retirement pensions on their deathbeds, he said.

“[However] There can be a very fine line when it comes to determining whether a payment is a membership benefit or a superannuation death benefit where the member is about to complete the withdrawal of the superannuation member shortly before death. ” he warned.

“What we see is that most strategies like this don’t take into account all the relevant considerations.”

Jell said there are a number of things to consider when trying to implement member withdrawals shortly before a person’s death.

“We need to confirm who the person making the claim is. Is it the individual member or their attorney? Who controls the fund? Is it the corporate trustee?” or do you deal with individual trustees when it comes to approving payments to members?” he asked.

Also, see what is written in the trust deed and what happens to that individual’s estate planning considerations if payments are made from the fund prior to death and assets are held in an individual’s name. is also important.

The type of assets being transferred should also be considered, he said.

“Do you need to sell the property to complete the payment, or are you looking to transfer the property for specie?” he said.

“The reality is that if all of this is not properly considered, the tax consequences of getting such a strategy wrong can be substantial.”

He pointed out that this kind of strategy is appropriate for different people.


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