A sneaky taxx was the phrase we heard yesterday at our Professional development day.

Let’s provide a very simple example.

After a full day of professional learning over 7 completely different topics there is a need to refresh & defrag.

Hence to  the tennis court with three other baby boomers.

I asked David what did he now do now that he s retired.

I look after 3 grandchildren which many  baby boomers do have .

If David was to expire whilst chasing down my forehand drive then just maybe part of his pension goes to his adult children or to his grandchildren

However they may not  receive all their share as the ATO wants its share.

The ATO wants a  share of David’s  pension  which has not been taxed yet as his adult children & grandchildren are according to the ATO non dependants.

As thus is income to the beneficiary then the Sneaky Taxx of ~ 17% will be at the beneficiary’s  marginal taxx rate.

The sneaky taxx could be a large amount so is there a solution to David’s estate planning?

Yes he could have put it in the bank where it will  earn less than a bank dividend & then it will go to probate & the time & costly finalisation of the estate.

How much does that take & how long & where there is a will there is a relative.

Yes he could have a so called A testamentary trust. but that has costs to set up & administer.

Yes there s a very simple solution & we were told yesterday of a sum of 17 Mallon in such a solution.

David probably doesn’t have that but the solution is still the same.

As an ex maths teacher I was reminded why I have 2 such simple  solutions.

There are many uses & benefits including a lower taxx rate than many non dependants taxx rates.

Its outside super & hence accessible.

The rules haven’t changed since we were first introduced to them in 1984.

A solution that by passes the will & can go privately to anyone or a charity or your ex girlfriend….

Or just maybe your own residential home care ??!!

Yes sir.

Ps very general advice