Join our investing community

Property Transfer before death

Discussion in 'Estate Planning' started by Luke83, 29th Sep, 2019.

  1. Luke83

    Luke83 Active Member

    Joined:
    25th Apr, 2018
    Posts:
    33
    Location:
    Hunter Valley NSW
    So my father is talking about handing over his assets before he dies to prevent some "lost children" coming in after his death to take the properties. I would assume doing a transfer would still need to pay Stamp Duty (NSW), is this correct or is there some way around that?
     
    twisted strategies likes this.
  2. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
    1,159
    Location:
    QLD
    transferring the property early has it's risks as well ( in some dysfunctional families )

    has he researched options in moving the property into a trust structure ( if i had any family left the legal papers would be flying already .. like paper darts )

    ( my extended family seemingly litigated over everything , so i resorted to simply out-living them )
     
  3. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    941
    Location:
    Sydney
    Yes duty would be payable if transferred before death, but not if passed via the will.
    Transferring before death won't necessarily mean his lost children cannot attack the asset, in NSW there are clawback laws under the sucession act - generally for 3 years before the death.

    Also the recipient of the asset could 'lose it'.

    He needs to consider the other aspects too such as lending, social security act, family law etc etc and alternative strategies.
     
    twisted strategies likes this.
  4. Luke83

    Luke83 Active Member

    Joined:
    25th Apr, 2018
    Posts:
    33
    Location:
    Hunter Valley NSW
    Since a will can be contested ( and any assets chewed up during the legal battle), is there any other strategies that you can recommend looking into?

    Right now he has not spoken to anyone, i keep telling him to either go and see a solicitor and get some advice or just sell it and enjoy his days but he is not that kind of person. My inlaw said they previously passed assets to each other by paying $1 but i cant see how the government would people to do that these days as they wouldn't be getting their cut.

    I dont know much about Trusts, is there an easy to understand guide somewhere online?

    I didnt know about the Clawback law, i better mention that to him, he is mid/late 60s so i would hope he has at least another 10 years in him but there is no guarantee, i would hate to hand over stampduty and then have it taken back.
     
    twisted strategies likes this.
  5. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    941
    Location:
    Sydney
    Yes he should seek legal advice.

    The gifting strategy before death is probably the safest, depending how long before it is. By safest, mean it will get the assets to where he wants them - but this could even be unsafe as they could then be attacked by creditors etc of the recipient.

    Other strategies are gift and borrow back, installment contracts - he could sell it to the recipent who would pay the price in installments with the debt forgiven at death perhaps.

    It is possible to transfer assets for $1 or nil, but duty would be at market values as would CGT.

    I have written a lot about trusts and estate planning strategies on the propertychat forum. see

    Index of Legal Tips Terryw's legal Tips Index

    Index of Strategies Terryw's Structuring Strategies
     
    twisted strategies likes this.