Retirement and inheriting funds.

As time goes by and if we are lucky enough - we age well and then pass away. When you receive an inheritance from a loved one that has passed, there are many emotional aspects and time taken to arrange things like funerals, selling a home, or it might be keeping a home and supporting other family members. When things settle somewhat – finances are on the list to be considered.

It is hard to plan for everything but sometimes it is good to start preparing your finances whilst the assets are in probate and haven’t reached your name yet. Somethings to consider include:

Tax – Now this can be tax the estate has to pay before it reaches you, or the tax that you may may be obliged to pay in the future moving forward as you inherit assets that may generate income or capital growth.

Centrelink – When receiving funds from an inheritance, the general rule of thumb is if the funds through the deceased person’s Will were intended for you – then they become your asset. I often get questions from clients and prospective clients as this may reduce someone’s Age Pension to nil for example. People then look to offload the inheritance to another family member for example like a child etc. In Australia you can do what you want with your money and that’s not an issue, however Centrelink gifting rules will apply and usually the majority of the asset will still be assessable in your name for a long period of time even if you have disposed of the asset.

Superannuation and retirement – It is also important to consider when the funds come in, what your plans are for them, this might be paying down debt or spending it on some capital expenses around the home. Next there might be surplus funds, with those surplus funds – it is important to consider your goals and plans. There may be opportunity to contribute the funds to superannuation to assist in providing extra income in your retirement or it could possibly assist in bringing forward your retirement.