Life Begins At.....
Issue link: http://ebook.aprs.com.au/i/23233
If they do, they can receive your super benefit tax-free. If they don’t, they can still receive the benefit but they may be liable to pay tax at up to 15%, plus the Medicare levy. The definition of dependant is quite complicated, but broadly it includes any of the following: • your spouse, including a de facto or same sex spouse, a person (of the same sex or a different sex) with whom you are in a relationship that is registered under an Australian State or Territory law; • your child (or your spouse’s), including an adopted child, foster child, ward or child within the meaning of the Family Law legislation. A child must be under the age of 18; • someone with whom you have an ‘interdependent relationship’ (that refers to a close personal relationship where two people live together and one provides financial and domestic support and personal care to the other); and • someone financially dependent on you. You can’t take it with you, but you can take control by JOHN PAUL D o you know what happens to your super when you die? It’s a simple question, but do you know the answer? If you haven’t thought about it or, if it is something you don’t want to think about, there’s a chance that your money might end up being paid to someone you wouldn’t have chosen. So it’s important to decide what will happen to your super if you die. It’s your money after all. You need a plan A good starting point is to think about who you would want to receive your super benefit if you died. 4 THE RETIREE SUMMER In many cases this will be your spouse or other close family, and you may be thinking of your super as just one part of your total assets that they’ll inherit. Does it really matter who gets what? It may, because for tax purposes super isn’t treated the same as other assets in your estate. Australia doesn’t have death duties any more, but there are still circumstances in which super benefits may be taxed on your death, even if that same money is tax-free to you while you’re alive. The key point is whether your intended beneficiaries qualify as ‘dependants’. It’s this last point about financial dependency that sometimes causes confusion. The most common ‘surprise’, when someone you thought of as a dependant turns out not to be, is in the case of adult children. Children under 18 are automatically treated as dependants, but above that age they need to be able to prove that they were financially dependent on you at the date of your death, otherwise any benefit they receive may be taxable. So, depending on your personal circumstances, it may be better to have any non-dependent adult children receive other assets from your estate, and leave your super to be paid to your spouse and/or other dependants. You may want to seek some advice about this. Convey your wishes Whatever your plan, the next step is to convey your wishes to your super fund. To do that, you’ll need to understand your fund’s rules and the