Bernie O’Sullivan and the team at Wills & Wealth would like to send you and your family our best wishes for the upcoming Festive Season.
As we near the end of 2024, we also take this opportunity to update you on matters which may be of interest and remind you that we are available to assist you with your estate planning, probate and property needs, both now and in the New Year.
New Government Probate Fees
The Victorian Government has dramatically increased probate fees, with effect from 18 November 2024.
The increase has been widely criticised as being a “tax grab” on deceased estates. Indeed, it does appear that the increase means that fees for estates over $1 million are not a true reflection of the cost of providing the service.
For estates valued over $7 million, the government fee has increased from $2,200 to $16,800!
The new fee has consequences for executors who will need to work out means of paying the fee before they have access to estate funds, which they can only access after Probate has been obtained.
As we have done for nearly 70 years, Wills & Wealth will continue to work with clients to assist in the probate process. Please contact us if we can assist you or your family.
Superannuation Death Benefits Tax
Many people assume that, after they die, their superannuation will be paid out free of tax, but this is not necessarily the case. The rules can be confusing.
As a starting point, look at your annual member financial statement from your superannuation fund. It will show your account balance and then divide that balance into two components – a tax-free component and a taxable component.
The taxable component generally represents monies paid to the fund which someone received a tax deduction for (such as your employer contributions) plus the earnings in the fund.
As a summary, it is usually the case that:
- Any payment to a spouse is tax free;
- Any payment to a minor child is tax free;
- Payments to independent adult children will be taxed at 15% of the taxable component;
- Payments of insurance proceeds to independent adult children might be taxed at 30%.
As a simple example, if Eveline died and her $1.6 million superannuation was taxable and paid to her independent adult children, tax of $240,000 would be payable!
If you have any concerns about your current Will or estate planning, please contact us and we can explain the tax consequence and provide strategies to ensure you are not paying tax unnecessarily.
Be Cyber Aware
You would be well aware of the need for constant vigilance to protect yourself from online fraud.
Unfortunately, law firms and their clients are also targets for cyber-criminals and cyber fraud. Cyber-criminals are experts at intercepting and modifying emails containing sensitive information including bank account details to try and divert your money to their bank account.
Often, there is no indication that an email has been compromised, as it will appear to be from a legitimate email address. Once funds are diverted, there is generally no or limited recovery through the banks.
Here are some precautionary steps you must take to protect yourself against cyber-crime and potential loss. We will also take steps to prevent the loss of funds.
What you must do
- Never rely on or trust emails from our firm providing bank account details. Treat all emails and electronic documents, including PDF documents, with suspicion, as if they may have come from a cyber-criminal or not legitimately sent by us.
- If you receive an email containing bank account details and requesting payment, you must call or come into the office to verify the authenticity of the email and confirm the bank account details.
- When calling us to verbally verify bank account details, do not use contact details from an email, even if it looks like the email came from our office. Always use a known telephone number or independently search our website.
- Never transfer money without first verbally verifying bank account details with us by phone or in person.
What we will do
- We will now tell you at the start of our work together what our account details are and not change those details unless we speak to you verbally first. We will not notify you of a change to bank account details by email only.
- We will call you to verify any bank account details you send to us by email on a known telephone number for you.