Considering leaving an inheritance?

According to Vanguard (2022), the next 20 to 30 years will see the biggest intergenerational wealth handover in history, predominantly between “baby boomers” and their children.  This includes the transfer of family homes, investment properties, superannuation and pension accounts, direct shares and a number of other financial and non-financial assets.

Having your Estate Planning (Will and Enduring Power of Attorney) up to date is a very important first step but there are several things to do in order to prepare for the effective transfer of your assets when you do eventually pass away

  1. Minimising potential taxation liability on your pension account by using a Super recontribution strategy prior to converting to pension phase.  This can save thousands of dollars in tax depending on your circumstances.
  2. Managing capital gains tax liabilities with superannuation contributions.  The sale of an asset (typically an investment property or shares, not including the family home) can often cause the realisation of a capital gains tax liability.  Through utilisation of concessional and non-concessional superannuation contributions we can help you to maximise the value of your retirement savings.  This may help you avoid a capital gains tax liability, in turn maximising the value of your retirement savings and the potential value of your assets.
  3. Transfer of main residence.  Following your death, your beneficiaries have two years to sell the main residence in order for it to be a capital gains tax exempt transaction.
  4. Transfer of Investment Property or other assets.  The sale of any other assets that have grown in value after you pass away will incur a capital gains tax liability under most circumstances.

Understanding the implications of the sale or transfer of your assets before or after you pass away is a crucial component of any financial plan.  If you have any questions on this or any related topic, please get in touch with the friendly team at Fleming Financial Planning today to discuss your situation.      

This website contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.