Opinion
I’m 40, single, and without children. Do I really need a will?
Noel Whittaker
Money columnistI am a single woman in my 40s, never married and with no children. Is it necessary for me to have a will? My understanding is, when I die, my assets would go to my parents if they are still alive and if they are not, then the assets will automatically go to my siblings. I don’t have life insurance, but I do have a house (under mortgage), super and a share portfolio along with some cash in the bank. I am genuinely curious whether I need a will or not? Or am I missing something I don’t know or not aware of?
My legal expert says the short answer is yes. You have significant assets, so probate will be required. Distribution isn’t ‘automatic’ and requires the court to review an intestacy application which could be costly and complex to prepare for your grieving family as well as requiring them to trace all your assets including what shares you have, your superannuation and your bank details.
There’s no reason to put your family through additional drama when you pass away, so it’s best to make up a simple will.Credit: Simon Letch
A probate application with a will is much easier than a probate application without a will. Why put your family through more drama? Just do a simple will.
I am keen to invest in property to help my children onto the property ladder. Is it better to buy property in joint names with my children or set up a family trust to make a property purchase? If through a trust, how does one go about setting up such a thing?
You don’t want to be buying property in joint names with your children because there can be capital gains tax consequences if or when you decide your share of the property should be transferred to them.
These would also apply to any purchase through a family trust. I think a better option is to encourage them to buy a property in their own names, and you could supply a deposit, either by way of a gift or as loan. This will give them the opportunity to make choices, so they can learn. Your accountant is the appropriate person to talk to about setting up a family trust.
I am uncertain if I have read you correctly but if you own an investment property and sell it, can you contribute the proceeds as a downsizer contributions?
You must comply with the criteria to be eligible to make the contribution. You must have owned your property for a continuous period of at least 10 years, which is usually measured from the date of your original settlement when you purchased the property, to the settlement date when you sell it.
The property being sold must be your family home (main residence) at the time of the sale, or it must be partially exempt from capital gains tax (CGT) under the main residence exemption.
Some types of property are not eligible under the downsizer rules. These include an investment property you have not lived in.
You have written about the benefits of keeping most of the family super in the younger spouses name. I am 69, my wife is 65. She is about two years away from the pension and we are both retired. I receive a defined benefit pension of about $1900 a fortnight, and $299 part age pension and have about $460,000 in Host Plus (accumulation phase) and my wife has about $30,000 in super.
From what I have read, I should transfer the bulk of my super into hers, where it will be sheltered from Centrelink, until she reaches pension age when she can apply. But I think I can only transfer a max of $110,000 each year according to the ATO. Would that be correct?
Under the existing rules the maximum non-concessional contribution is $110,000 a year, but this will increase to $120,000 on 1 July. However, you could utilise the bring forward rules and contribute $330,000 now to your wife’s account.
I can’t see this will have any effect on your pension because based on the information provided you are income tested and moving $330,000 to your wife’s superannuation fund will have no effect on that because it’s an asset change. The major factor determining how much age pension you get is the income from your defined benefits pension.
Noel Whittaker is the author of Wills, Death & Taxes Made Simple and numerous other books on personal finance. Email: noel@noelwhittaker.com.au
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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