The Northern Territory news Mon 16 Mar 2020
NT news
The Northern Territory news; NewspaperNT
2020-03-16
English
Community newspapers -- Northern Territory -- Darwin; Australian newspapers -- Northern Territory -- Darwin
News Corp Australia
Darwin
application/pdf
Copyright. Made available by the publisher under licence.
News Corp Australia
https://www.legislation.gov.au/Details/C2019C00042
https://hdl.handle.net/10070/795942
https://hdl.handle.net/10070/799008
MONDAY MARCH 16 2020 LIFESTYLE 25 V1 - NTNE01Z01MA EVERY year about 160,000 Australians die thats roughly the population of Cairns. When you lose a loved one, the last thing you need is financial complications. To ensure youre ready to handle the money side when a family member dies, its worth understanding some common estate-planning fallacies. Resolution Legal Melbourne accredited mediator Tim Whitehead said one false assumption was that once a valid will existed, then that will because someone else will bear those costs. Not my problem. Usually an estranged child, the challenger claims to have PLAN AHEAD Almost everyone needs a will. Even young adults have assets, such as smartphones. Composing a will with legal aid usually costs hundreds, not thousands, of dollars. Dont worry about inheritance tax it was abolished in 1979. THEcoronavirus pandemic has led to tumbling interest rates andaplunging sharemarket, and thenation is headed for a recession. Governments, companies, small businessesand individuals have been closely reassessing their financial state, and left scratching their heads onhow to copewith this latest economic downturn. Thesituation is sodire its resulted in theFederal Government rolling out an economic stimulus package worthabout$17.6billion, to minimise thedamage of the coronavirus pandemic to the economy. But whileall this has been going on,house prices nationally particularly in Sydney andMelbourne remainstrong andare continuing toclimb. So it begs the question: Where is thebest place to put your money right now? CASH TheReserveBank of Australia board cut thecash rate to a record lowof 0.5per cent this month, andwhile its great news for borrowers its the exact opposite for savers. Banks have started to reduce their interest returns on moneykept in their institutions andsome accounts arenow offering pitiful interest rates that arevirtually invisible, at just 0.01 per cent. LifespanFinancialPlannings chief executiveofficerEugene Ardinosaid the low-rate environmentwas particularly tough for retirees. They will generallyhave lower-riskportfoliosand its a struggle for themtogetadecent yield, he said. But MrArdinowarned those chasinghigher returns, dont justpile into investments that seem tohave higher yields because often they comewitha lot of risk. So-calledhigher-interest savings accounts arepaying less than 1per cent now, he said. MORTGAGES AND CREDIT CARDS Interest rates onhome loans both fixed andvariablehave neverbeen cheaper. Somebanks, including ING, recently slashed their threeyear, owner-occupier, principaland-interestdealsdownto just 2.49per cent. Its hard to believe they are this low. The Commonwealth Banks general managerof everyday banking, Kate Crous, said the reduction in interest rateshad givenborrowers some good options. Youcankeep your repaymentswhere theyare, even though the interest rate has gonedown,andpayyour loan off sooner, she said. Likewise, if you areon monthly repayments, consider Keep money safe in a crisis There are ways to limit damage to your finances in an economic meltdown, writes Sophie Elsworth fortnightly togetyourdebt downfaster. MrArdino said it creates a great opportunity for borrowers to smash their home loandebt. Putanyextra money into your mortgageandoffset account if youhave one,he said. Pumpingextracash into a mortgagewill helpchipdown theprincipal at amuch faster pace andput theborrower on track tobreak themortgage shackles. MrArdino also said the rate cut couldbe anopportunity to roll other debts that attract higher interest rates intoa home loan. Iwoulduse that money topaydown higher interest-paying debts, such as credit cards,he said. The idea is togetyou paying as little interest as possible, especially if its non-deductible interest, such as credit cards, home loans andpersonal loans. Financial comparison websiteRateCity shows the average credit card interest rate is 17.01 per cent, so rolling card debt intoamortgage that attracts a rate of2-3 per cent couldmakeperfect sense. SHARES TheASX200 has been in free fall for thepast fewweeks, hitting hard thosewith shareportfolios or super accounts. But JBSFinancialStrategists chief executive officer Jenny Brown said for those witha long-termtime horizon, you couldbuy quality assets and weather the storm. Qualityblue-chip assets at good prices orquality exchanged-traded fundsare going togive youagood, diversified mixof quality shares, she said. What we wouldnt be recommending isbuying smallcapormid-capstocks.They are a lot more volatile. If youwant to go into the stockmarketyou can buy anASX50or ASX200ETF. That might be the right thing for you. But Ms Brown urged Australiansnot tohave any knee-jerk reactions. PROPERTY On anannualbasis, bothSydney and Melbourne movedback into double-digit annualgrowth rates, withvalues up 10.9 per cent and 10.7per cent respectivelyover the 12months ending February. REAGroups chief economist,NeridaConisbee, said putting money into propertydepends onhowlong you want tohold on to it. Wedo tend to see, in times of uncertainly, people seeing propertyas a safeasset tochoose to invest in, she said. Thereason being the sharemarket is highly volatile and it canbe quite alarming to see thevalue of yourportfolio drop quite significantly. Ms Conisbee said investing in propertycouldbe agood option as long asyouhave a tenant paying rentandas long as you are looking tohold long-term. SUPERANNUATION Superaccounts havent escaped the latest financial downturn. Manybalances have gone backwardsafter the tumultuous time onthe sharemarkets, both locally andglobally. Pumping extra into supercan reap rewards, the reasonbeing pre-taxor concessional contributions are taxed at a much lower rateof 15 per cent, insteadof apersonsmarginal tax rate,whichcanbe as highas 45percent. Dependingon what stage you areat in life, pumping extra cash into superannuationcould be agoodoption. Where theres a will theres also grief and greed DAVID WILSON just be how it is, and it couldnt be challenged. Well, clearly we have very detailed laws about how a will can indeed be challenged, he said. The industry was distasteful, Mr Whitehead said. But its certainly a very, very lucrative area because usually all the legal costs for everyone, win or lose, come out of the estate, he said, adding that fees could be $600 an hour. Lawyers feel free to charge at extraordinary rates, and people feel free to have a crack and say, Well, Ill challenge the will if I get nothing, thats OK been close to the deceased. And the rest of the family will know you were left out of the will because you had no relationship with your parents, Mr Whitehead said. And then you try to prove what relationship someone had. And its very tricky. Another trap was thinking a do-it-yourself post office kit was fine when in fact its like buying a brain surgery kit and giving that a go yourself doing it yourself at home, he said. Avoid assuming self-service will save $200 when it can end up involving $20,000 to $30,000 in legal fees as people fight over what you meant. Its a bit tragic when these things happen, Mr Whitehead said. Avoid bequeathing a house without further thought. If you later sell and buy another house without updating your will, the person who was supposed to get the original house could receive nothing, Mr Whitehead said. Adams Legal estate expert Stephen Quartermain warned against forgoing the paperwork. Without a will, your family will lack the power to make many important decisions, he said. They will be bound by what the law dictates. This means you lose control of who gets your assets, for instance. A second myth Mr Quartermain identified is that remaining family members would inevitably stay civil. Unfortunately, the prospect of money changes everything, he said. Disputes over deceased estates can be long and expensive. The clearer you are in your will about how you want your estate divided up, the lower the chance of relationshipdestroying disputes. MoneysaverHQ editorial | Anthony Keane anthony.keane@news.com.au | Sophie Elsworth sophie.elsworth@news.com.au