CALL US: (07) 3367 0999 | EMAIL US:

Protecting your finances after separation

The end of a relationship is a particularly difficult time for most individuals – among the emotional pain comes the burdensome administrative tasks such as sorting out finances.

Although these tasks may seem tortuous/complicated; it is best to promptly address financial issues to safeguard your finances against misuse and ensure a piece of mind.

Here are three things to consider when protecting your finances after separation:

Joint accounts
If you think your former partner may exploit your finances, it is worth considering closing your joint accounts. Both account holders need to agree that the accounts should be closed. You will need to discuss how the remaining balance will be divided with your former partner, as you must have zero funds in the account before closing it. It is then necessary to establish your own account and redirect any direct debits or credits from your joint account to your new account (or make alternative arrangements).

Your will and power of attorney
Your will may not be the first thing to come to mind after a breakup, however, it is a critical document that needs to be reviewed, especially if your former partner is listed as a beneficiary or executor. After separating, review your will with a legal professional to make any necessary changes. If you appointed your former partner as your power of attorney, you may also consider revoking them upon separation. Again, a legal professional can aid you with this decision.

Home and other joint loans
Upon separation, it is best to advise any lender/s of your separation and the arrangements for paying the loan. Notify your bank if you wish to discontinue any redraw facilities or linked credit cards attached to your loan. Ask your bank for a written confirmation letter and keep a copy in case there are any issues down the track.

Business
advice

taxation
planning

compliance
services

News

Tax on super death benefits for dependants vs non-dependants

July 9, 2020

A super death benefit is the super paid after a person’s death, usually to a nominated beneficiary. These benefits are subject to different tax treatments, depending on whether the beneficiaries are dependant or non-dependant.

Superannuation death benefits will generally be received tax-free by tax dependants, who are considered to be:

Dependants will not have to pay tax on the tax-free component of their super in the event that they:

However, they will be taxed at their marginal rate if they receive a capped benefit income stream and:

Not all super death benefits are subject to tax; for non-dependants, there is a taxable portion. This component is largely made up of after-tax super contributions that the deceased member has made.

Super death benefit payments are subject to tax when:

Non-dependants must calculate how much money in the super account is a:

The amount of tax non-dependants pay will be based on their marginal tax rate, however, this amount may be reduced by tax offsets. For the taxed element of the taxable component, the effective tax rate is your marginal tax rate of 17% (whichever is lower). For the untaxed element of the taxable component, the effective tax rate is 32% or your marginal tax rate (whichever is lower).