Advice on tax effective Estate strategies

Tax and Estates

There may not be death duties in Australia, but there are certainly tax considerations and tax implications when dealing with estate assets and superannuation death benefits. How you deal with these can make a big difference to the tax position.

An important part of administering a person’s estate after their death is ensuring that their tax affairs are up to date (for the deceased personally and also for the estate). This is a personal responsibility of the executor. It is also the executor’s responsibility to maximise the value of the estate for the beneficiaries.

Creating a Tax and Distribution plan to save on tax

An executor of an estate should develop an estate ‘Tax and Distribution’ plan which considers the taxation implications of the sale or transfer of assets, and which considers the timing of any sale or transfer. The plan should be done in consultation with your estate administration lawyer and an accountant experienced in the taxation of deceased estates.

A successful distribution plan will consider if the appropriation (specific allocation of an asset to a particular beneficiary) can legitimately minimise the tax burden for the estate as a whole, and/or for that particular beneficiary. Examples include:

• allocating superannuation death benefits to beneficiaries who are tax dependants
• whether to sell or transfer a deceased person’s main residence
• whether to sell or transfer investment assets (e.g. shares, properties)
• considering complications due to foreign beneficiaries

Putting the right strategies in place can save you money

At Estate First Lawyers, we can assist you with the tax planning for distribution, in consultation with the estate accountant, to ensure the estate is maximised for the benefit of the beneficiaries. We also offer the full range of estate administration services to ensure the entire process runs smoothly during this difficult time.