Your money Q&A
Q WHEN a husband dies and leaves the family home (estate) to his wife and all his superannuation to their children, does the wife have any claim whatsoever on even a portion of the super? Or is super regarded as a gift and only goes to the recipients who were bequeathed it?
A SUPERANNUATION is not disposed of in terms of the will – it is the trustee of the super fund who makes the decision. A person can get around this in many cases by executing a binding death nomination whereby they state exactly who they wish to get their super.
This is a good strategy if there are likely to be family fights but a very bad strategy if the family is happy.
This is because there is a death tax of 15 per cent plus Medicare levy on that portion of the taxable component of the super fund of the deceased that is left to a non-dependent. A spouse is always regarded as dependent.
I heard of a situation recently where the parents executed binding nominations leaving half their superannuation to their spouse and the remainder to be divided equally between their two children.
The husband died suddenly, leaving $2 million in super. If there had been no binding nomination the entire $2 million could have been left tax- free to the wife but the binding nomination forced the trustee to pay $1 million to the wife and $500,000 to each child, who were high income-earning professionals. The tax on this was $170,000.
This is a great example of the importance of getting good advice when estate planning is being considered.
Q REGARDING the government guarantee on bank deposits: does this mean a $250,000 maximum for a married couple with a joint account or can they have this amount twice but in different banks?
A THE cap applies per person and per bank. So if you have $250,000 with one bank and $250,000 with another, both of your deposits are guaranteed. Joint account owners are entitled to an individual cap.
I must confess I wonder why this is such an issue for many people. Remember that bank depositors are one of the first to be paid if the bank gets into trouble, and the shareholders are the last.
Therefore, for a depositor to lose the entire sum deposited, all the shares in the bank must be worthless. Can you imagine the state of the economy if shares in the major banks became worthless!
- Do you have a question? Send to Q&A, PO Box 130, Wyong NSW 2259 or email edit@thesenior.com.au A selection of questions will be covered in this column. Personal replies are not given.
