Where there’s a will

If you’re discussing with your elderly mother her will and you both have qualms about the grandchild’s partner/spouse/de facto, what steps can you take to prevent that person pocketing any future windfall?

Laura Menschik says another way to protect family inheritance from being eroded by a bad relationship or divorce between the child and their partner. She suggests that parents could inherit all of granny’s money first (with prior family discussions) and then provide the child’s portion as a no-interest loan if there’s a view that the child’s relationship will collapse. That way, the Family Court will see this money as a liability and treat it differently. The loan will be taken out of the money available and can later be returned to the child. However, it’s important that a codicil is included in the parent’s will to forgive the loan in the event of their death. Otherwise, the child may be forced to return that money to the estate by the trustee.

Do you know how much more money you got back from Mr Costello in the budget tax cuts? Julie Berry, senior adviser at Bridges Personal Investment, Port Macquarie: ‘For those women at home or in part-time work, your husband can make a super contribution on your behalf and in return, they may get a tax offset of up to $540. Your retirement savings can also be boosted by the Government’s new co-contribution initiative which means if you contribute up to $1,000 to a super fund, the government will also chip in up to $1,500 to that same fund on your behalf. To receive that, you must earn less than $28,000 per year.

The other good news is that if you will not pay tax from July 1 this year unless you earn more than $7,382 and this includes the low income tax offset of $235 and the reduction in the lower tax rate.

For those on higher salaries, the extra could be an entry into investing for many women with low savings. For example, if you’re on $80,000 a year, your tax savings equate to $1,412 ($27 a week). And from 2006-07, you jump up to $2,252 or $43 a week. More good news for higher income earners is the abolition of the super surcharge from July 1 this year. Again, this makes boosting your super more attractive and the government has given a tax incentive for those on higher incomes to do so.’

In trouble with credit? Can’t afford financial advice? Don’t know where to start? Log onto www.amp.com.au for their free CD offer called ‘Thinking Ahead’. Free emergency financial counselling services include: Credit Helplines, Lifeline creditline and in NSW www.financialcounsellors.asn.au

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