Could inheritance tax make a comeback?

Retirement and baby boomers continue to be a large growth demographic for the legal and financial industry, but I think retirees are becoming disenchanted about the various pieces of advice that they are receiving.

My experiences of Estate Planning have often involved either buying life/trauma insurance and establishing a will, while family trusts are used for tax minimisation and the distribution of income.

Although many retirees have an attitude towards their wealth of either, “It’s no use to you when you’re dead” or “That you can’t take it with you”, they do feel concerned what happens to the money after they have died.

Yet, it seems that even the best estate plans still end up in arguments and disputes.

Bickering over estate assets may be curtailed if estate planning advice extends beyond the selling of insurances or pre-paid funeral packages.

One aspect of estate planning that I don’t hear being discussed is “asset protection”.

When I think of the phrase “asset protection’, it’s often based around protecting your wealth from creditors and soured family, personal or business relationships. In other countries, asset protection also involves planning for inheritance tax.

Maybe a company, a family trust or my pension fund should own more of my assets. After all, these entities “keep on living” after I have passed away.

Planning for taxes?

Australia abolished inheritance tax (sometimes called death or estate duties) in 1979. Some readers will have experiences of how devastating this tax was on their family wealth.

We are now heading into a period of a massive transfer of generational wealth. At the same time governments are now looking to distribute wealth “wider and more evenly”, while also searching for more revenue.

Australians should at least prepare for a possible return of estate taxes.