Sunday Territorian

Consult a lawyer as inheritanc­e path full of pitfalls

- Brenton Miegel Money Man Email your questions to sundaymone­

I am aged 81 and my partner is 83. We do not live together. I own my own home and he rents a SA Housing unit. I receive a full age pension, he receives part Centrelink age pension, super and an overseas pension. My partner spends time at my home and gives me considerab­le physical help to maintain it and contribute­s to household expenses incurred because he stays at my home. I have one surviving son and my partner has five estranged adult children in another state that he has not seen or been in contact with for many years. I have made my will to give 50 per cent to my surviving son and 50 per cent to my partner, hoping that it will give him some financial assistance if he needs to go into aged care should I not survive him. My partner’s will, should he survive me, leaves his small estate to me. I have my concerns that perhaps I am leaving my partner with a problem with Centrelink that he will not be capable of dealing with, as I am not sure of the rules regarding inheritanc­es. He would inherit at least $250,000. Should this inheritanc­e cause problems with his current pension situation, he would prefer not to receive it rather than have to deal with Centrelink and possible changes to his pension and current situation. Can you please advise on the Centrelink rules affecting receiving an inheritanc­e re his aged pension? Would it be more sensible to omit him from my will to save him the headache of dealing with Centrelink (as he can live comfortabl­y on his current income) and has no wish to receive an inheritanc­e if it is going to cause him a

problem to deal with? Finally, would his estranged children have any claim on his estate?

Many of the questions you ask should be directed at a lawyer who specialise­s in estate planning. Second/subsequent relationsh­ips can make estate planning very difficult, and the added complexity of estrangeme­nt adds another layer! From a Centrelink perspectiv­e, any funds inherited would be added to the assessable assets of the recipient, therefore potentiall­y decreasing any income support received. The decrease in age pension income may be offset by any income from the investment, and this needs to be considered. I would not necessaril­y consider “not” bequeathin­g part of your estate to your partner as it will “cause him a problem” with Centrelink. I would suggest you work through the issues sooner rather than later, so as if you do predecease him there is an understand­ing as to how to proceed. Finally, in the event you do predecease your partner, and he inherits from you, he would need to review his will. Speak with an estate planning lawyer.

Brenton is a director and an authorised representa­tive of Goldsborou­gh Financial Services Limited. His advice should be considered as an opinion. Readers should consider engaging their own personal financial adviser. Questions and answers may have been edited for length.

 ?? ??

Newspapers in English

Newspapers from Australia