Articles

Self Managed Super Fund (SMSF) Purchases

Using your SMSF to purchase a property with a loan

Married couple Jason and Molly Hilder have set up a Self-Managed Super Fund known as the Hilder Superannuation Fund and wish to purchase a property with the assistance of loan funds. Wisely, Jason and Molly consult with their accountant and financial advisor as to how to go about the purchase and loan arrangements properly.

Jason and Molly learn that there are very strict compliance rules, among them:

  • The property must be for investment purposes; they and any fund members cannot live in it;
  • An entity will need to be set up to hold the property while the loan is on foot;
  • In the event of loan default the lender has no right of recourse on any other assets of the fund;

There are some technical terms.    

  • The Apparent Purchaser: is the purchaser of the property established purely for the purpose of acquiring and owning the property during the course of the loan. The Apparent Purchaser is sometimes referred to as the Bare Trustee.
  • The Holding Trust: the trust set up with its own trustee while the borrowing for the property is on foot. Whilst the Hilder Superannuation Fund is ultimately purchasing the property the apparent purchaser is the trustee of the Holding Trust.        
  • The Fund Trustee: the trustee of the Hilder Superannuation Fund. The property must be held on trust for the […]
Thursday, February 26, 2015|0 Comments

Superannuation: Your Binding Death Benefit Nomination

Ensure that after your death your superannuation is paid to who you want

What is a Binding Death Benefit Nomination?

 

A binding death benefit nomination is a direction you sign to the trustee that sets out the beneficiaries who you want to receive your superannuation benefits upon your death.

First, a story to tell.  Paul and Greta were in their late 30s with 3 young children and had a lovely home on Sydney’s North Shore.  Paul’s high income as an account executive for a large company adequately covered the substantial mortgage payments. Greta was a full time mother.

Tragedy struck when suddenly, Paul died of a brain haemorrhage.  His superannuation amounted to around $500,000.  Greta thought that as the sole beneficiary of Paul’s Will she would also receive all his super.

Imagine the shock when Greta was informed by the trustee of Paul’s super fund that as Paul had not signed a nomination, the superannuation benefit would not be paid to Greta but would be held in trust for the children.  So far as the super was concerned, Paul’s Will, though valid, was irrelevant.

Faced with a huge mortgage to pay, Greta felt compelled to take legal proceedings against the trustee.

 

The Importance of a Binding Death Benefit Nomination

Unless your super fund is holding a valid nomination, when you […]

Thursday, February 12, 2015|0 Comments

What is a Pre Sentence Report?

Pre Sentence Reports

If a Defendant has a criminal record, the court may order a Pre Sentence Report. The report, prepared by a Probation Officer, will assist the magistrate/judge in determining sentence and will cover such issues as family history, education, employment and attitude towards the offence. The report is made available to us at court on the sentence date.

Pre-sentence reports

Sometimes, the magistrate/judge may request a same-day report from the duty Probation Officer at the court. More commonly though, the matter will be adjourned for around 6 weeks for the preparation of the report. The appointment with the Probation Officer must be made within 7 days of the court ordering the Pre-Sentence Report and it is vital that the Defendant keeps the appointment.

To assist in the preparation of the report, we recommend that the Defendant prepares themselves prior to the appointment. Examples of a few things that the Defendant should be prepared to hand to the probation officer are details about the community involvement links, any educational certificates/references and what efforts and lifestyle changes the Defendant has made to avoid the risk of re-offending.

Although the recommendations made by the Probation Officer are not binding on the court, they can be persuasive on the court’s determination of the appropriate sentence. It is an excellent opportunity for the […]

Thursday, December 11, 2014|0 Comments

Habitual Offender Declaration

Your Driver’s Licence: Habitual Offender Declaration

A person is declared a Habitual Offender after being convicted of at least three “relevant offences” in the previous five years. This declaration imposes an additional period of licence disqualification for five years, which is to commence at the end of any licence disqualification period imposed by the Court.

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The court can make an order to quash the declaration in two ways:

  1. Quash the declaration at the time of convicting the person of the third relevant offence; or
  2. Quash the declaration some time later.

In the event it is the latter, the person should make an Application to quash the Habitual Offender Declaration at the end of the court imposed period of licence disqualification.

In making such an application, the applicant is required to show to the court that the disqualification imposed by the declaration is a “disproportionate and unjust” consequence having regard to the total driving record of the person and any special circumstances of the case.

If you have received notification either by the Court or the Roads and Maritime Services (RMS) that you are now subject to a Habitual Offender declaration, you need to speak promptly to a reputable lawyer.

Contact Acclaim Legal today on (02) 9744 0722 to […]

Thursday, November 27, 2014|0 Comments

Special Disability Trusts

Some basic considerations in establishing a Special Disability Trust

In 2006 amendments were made to Commonwealth legislation, the Social Security Act (SSA) for the benefit of a severely disabled person to meet their reasonable care, accommodation and medical needs

Assets held in a Special Disability Trust, provided they are below the threshold ($626,000 as at 1 July 2014) will not count towards the Beneficiary’s assessable assets (for the purpose of determining the beneficiary’s eligibility for a pension). An immediate family member can also transfer assets into the Special Disability Trust (up to $500,000), without having that transfer affect their own eligibility for a pension.

Certain requirements

There are certain requirements in establishing a Special Disability Trust including:

  • The Trust must be established with a trust deed or by a Will and comply with the model trust deed provisions under the SSA;
  • The Trust must have only one Beneficiary;
  • The Trustee/s must be over the age of 18;
  • The Trust must meet the severe disability definition in the SSA and provide for the accommodation and care needs of the Beneficiary;
  • The Trust will only exist during the Beneficiary’s lifetime;
  • The Trustee must provide annual financial statements of the trust as at 30 June of the relevant financial year.

 Definition of Severe Disability

A Beneficiary under a trust must establish the following to meet the definition of Severe Disability:

Thursday, October 30, 2014|0 Comments

Testamentary Trusts

What are the benefits of a Testamentary trust?

A Testamentary trust is a particular type of trust established by your Will. On your death the trust becomes the owner and manager of the assets that you give to the trust in your Will.

Your appointed trustee has the discretion to distribute the income and the capital of the trust to nominated beneficiaries.

Tax effectiveness

·     Testamentary trusts are subject to a different tax regime to other types of trusts

·     Each child beneficiary has a tax free threshold of $18,200 (2014/15)

·     The income of testamentary trusts can be distributed by your trustee to those beneficiaries that pay the lowest rate of tax

·     The tax saving from the income of a testamentary trust being spent on a child or a grandchild may effectively subsidise the education or maintenance of that child or grandchild

Capital gains tax

There is no imposition of CGT on the transfer of assets to a testamentary trust. The death of a person is often a tax effective time to effect the transfer of an asset into the shelter of a trust.

Asset protection

In a testamentary trust your estate assets can remain the sole property of the trust without passing to the beneficiary.  This has significant benefits where the beneficiary is experiencing bankruptcy proceedings, a family law property settlement, or entitlement to social security benefits.

Family law disputes

A […]

Thursday, July 31, 2014|0 Comments

Michael Hume is your Mediator

The Mediation Process

Mediation is a voluntary and cooperative process requiring goodwill and flexibility from the parties. Both parties must agree to mediation and seek to reach a workable agreement to settle the dispute to their mutual satisfaction.

Mediation is a flexible process in which your mediator helps the parties to draw up the rules for the process and decide how the mediation will be conducted. The parties remain in control of both the procedure and the result as mediation is designed to specifically meet their needs and allows them to reach a solution acceptable to them.

Over and above conflict resolution, mediation aims to re-establish appropriate communication between the parties and thereby prevent future conflict. Mediation is conducted in private, in confidence, and in an informal setting conducive to open and frank communication. Once agreement has been reached, your mediator will help in the drafting of terms.

Why choose mediation?

Mediation will offer you a timely, cost-effective alternative to the court process, whether your dispute relates to:

  • family law (property or children)
  • workplace & industrial disputes
  • deceased estates
  • business or partnership
  • relationship breakdown
  • commercial litigation
  • leasing
  • your neighbour

As your mediator, Michael Hume places great importance on understanding your position, insightful analysis of the issues and appropriate briefing to brainstorm all settlement options. Michael Hume’s sensitive outline of the process will give you the confidence to navigate the challenges […]

Thursday, July 24, 2014|0 Comments

Collaboration not Annihalation: Insight into the Collaborative Law Process

By Michael Hume, Principal at Acclaim Legal & Kelly Batey, Principal at Batey’s Family Lawyers.

Separation and divorce is a major life transition. While it marks the end of one part of your life it is also a trigger for opportunity and growth. As the saying goes – “all dark clouds have a silver lining”.

Divorce does not have to be a totally negative experience. There is another way.

For the most part, people who are separating, just like you, are normal, responsible people. Unfortunately, the fact that they are going through a traumatic, life changing experience that is fraught with emotional upheaval, additional financial pressures and conflict, cause some of these people to act badly.

They experience a sense that they are not in control of their lives. Then there is the knowledge that it may be three or more years before their matter finally gets to a hearing in the family law courts. They are not at their best.
It is too easy to make mistakes that later turn into regrets .

Collaborative Law is an alternative process to the traditional court based divorce process.

It focuses on meeting the family’s needs for the future instead of focusing on blame and revenge for the relationship breakdown.

The essence of the collaborative model is to allow each person to maintain their dignity and at the same time, to contract […]

Wednesday, July 23, 2014|0 Comments