John is 84 years old and a widower with two adult children. John suffers a severe heart attack, is placed into intensive care and is given only days to live.
John has in his SMSF a property valued at $1 million. He and his former wife saved well throughout their lives, and had been told super was the best place to hold their assets.
As a result, it meant that they paid no tax throughout their retirement years. This was an ideal situation for the retirees.
After John passes, however, his super will have to go to either his estate or to one or both of his sons. Generally speaking, this would not create issues, but taxes will be incurred of at least $150,000 on the super.
What can be done?
This is a frustrating issue to be dealing with at this precise moment for John and his loved ones, but it is an important one.
The property should be transferred out of the fund and into John’s name personally, and immediately. This would mean that one (or both) of John’s children have to have an enduring power of attorney over John.
This will involve taking urgent advice from John’s accountant and solicitor but dealing with the situation in a timely manner should save John’s grown children $150,000 in tax.
If you have a similar situation or want to find how your loved ones can avoid paying “death” tax, contact me on 0432 366 690.