News

Complications over the limit

(page 28 of The Weekend Australian Financial Review, 19-20 November 2011)

A prominent superannuation adviser has urged the government to reconsider its decision to restrict super contributions limits for the over 50s from next year. Mercer senior partner David Knox says the proposal to limit anyone over 50 to the $25,000 a year concessional cap if they have accumulated more than $50,000 of super is not only excessively complicated but also overlooks the fact many of those over 50 have not had the same opportunities to accumulate retirement savings as future generations are likely to have. It's only when they get to their 50s, says Know, that may can put more money aside. This has been the case for years and for most hasn't changed.

 Knox says allowing people, especially the over 50s, to save with tax concessions encourages a greater sense of engagement in super. Rather then cutting back, the government should therefore continue to encourage greater savings with concessions.

Continued on page 28 of The Weekend Australian Financial Review, 19-20 November 2011

Company trumps the 'me' generation

(The Weekend Australian Financial Review 19-20 November 2011 pg 28)

While having individual trustees is the easiest and most cost-effective method for establishing and administering a DIY fund, there are benefits to susing a corporate trustee, says Chris Balalovski, head of strategic advice at Perpetual Private Wealth.

If ever there is a need to add or remove a trustee, such as on the death of a memeber, it avoids the necessity of having to advise assest registries of the change in ownership of the investments.

A feature of companies is perpetual succession, which means they can continue indefinitely. This can provide addtional certainty over control of the fund in the event of the death or incapacity of it's members. Under a corporate trustee you can have a sole member DIY fund, avoiding any need to appoint another individual trustee to become involved in the fund's decisions.

That said, chaging from individual trustees to a corporate trustee will require amendments to the DIY fund's trust deed, followed by the fund trustess then having to advise all relevant banks,brokers, share registries and titles offices of the new corporate ownership.

Although there's no prohibition on an existing company that is carrying on some other activity acting as the trustee of a super fund, doing so may present some problems. If the company is subject to litigation, all its assets may be exposed. If the company is sued as a DIY trustee because, for instance, a tradesman working on a fund-owned property has an accident, then other company owned assets may be vulnerable. As a result, it is advisable to have a "clean skin" company that conducts no other activities nor holds any other assets act as the trustee. Compare this with having individual trustees, who could find their personal assets exposed in litigation.

Insurance Brokers

Where your insurance has been arranged through a Broker, the Broker has certain obligations and if you find that your insurance cover is not as you expected or understood then it may be that you will have to claim against the Broker.

Anyone experiencing difficulty with insurance claims should definately not take no for an answer and should put together all relevant documentation and consult a Solicitor.

Family Law

Children - dispute as to choice of school
In Dreyfus & Kearney [2010] FamCA 1054 a dispute as to choice of school was resolved by Ryan J who required the child to be enrolled in the school chosen by the child from two schools the mother allowed him to choose from. Relevant were the mother's payment of all school fees, the father's failure to pay child support or school fees and the likelihood of future default. In Whitton and Anor (No. 2) [2010] Fam CA 119 Austin J ordered that the children attend the same school, near the home of the paternal grandmother who had been granted equal shared parental responsibility. Austin J held that the children's best interests were the paramount consideration, not the mothers freedom to enrol the children near to where she might decide to live.