We have seen some deceased Estates administered in an orderly fashion, with effective Tax Strategies, and Centrelink benefits.

On the flipside, there have been some real nightmare ones where a lack of proper advice from a Solicitor and our input from a tax perspective, have led to some unfortunate and costly outcomes

Some important reasons to address your Estate Planning:

• If you die without a Will, an Administrator will distribute your assets in accordance with a Government Formula. It’s your money, you should decide who get is, not the Government.
• Any assets in joint names will pass directly to the survivor and bypass your Will. This can work both for and against your wishes without consideration from your Solicitor.
• Most people think of assets as being their house, bank account, shares, and Super. But Super is generally not an Estate Asset. It is up to the Trustee (Manager) of your Super Fund to work out who to give your Super balance to.
• A Binding Death Nomination will direct the Trustee in how to pay out your Super and any Life Insurance inside your Super Fund. It is very important to make a valid Binding Death Nomination which reflects your wishes. And unlike a will, there are restrictions on who you can nominate as your Super Fund Beneficiary. Generally you can only nominate your spouse, a child or your Estate (commonly referred to as your “Legal Personal Representative LPR”). There are some other options, but leaving your Super to your parents or sister/brother is not always a valid nomination.
• Power of Attorney documents are really important, but not often addressed. They can be issued for a specific purpose (such as while you are overseas on holiday) and they can be enduring (last through until revoked or death).
• There are three main power of Attorney documents Financial: Able to deal with decisions regarding Bank Accounts, Property, Investments and Super.
  Medical: Able to decide what treatment is to be administered.
  Guardian: Able to decide where you will reside i.e. rehabilitation centre or aged care facility.

It is generally advisable to address all 3 Power of Attorney documents at the time of preparing a Will.

A Solicitor will be able to appropriately advise on how to best address your Estate Planning needs. We recommend a joint meeting with ourselves and your Solicitor to make sure there are no adverse tax implications.

Like most things in life, there are pro’s and con’s.

Keeping a place just for yourself (and perhaps family) is a great option to give you flexibility for a spontaneous getaway and means you can leave things set up how you like it.

For many people their finances may not allow as much freedom and getting some rental income might make your dream happen. But the obvious drawback is that you will have someone else using your stuff, you can’t leave personal or valuable there, and your tenants most likely want to use the property at the same time you want to.

Through our finance company – GNS Plus Pty Ltd, you have access to a variety of home loan solutions.

If you have never used a Mortgage Broker before, here is a quick run-down:

Your Broker is working for you, not the Bank. Brokers have the skills, experience and tools available to get you a good deal, explain all the different options and make recommendations to you on how to maximise your repayments and to cut your interest bill.

Our GNS Plus Lending Manager has access to over 30 bank and can evaluate what is best for you from:

• Variable/Fixed Rates
• Owner Occupied/Investment
• Residential Commercial
• Offset/Redraw
• Line of Credit
• Constitution Loans
• Interest Only/Principle and Interest
• SMSF Gearing
• Reverse Mortgages

The benefit for you is we do all the leg work and shopping around, so you can relax knowing you’re getting your finances sorted.

Contact Paul on 9499 7444 for a complimentary consultation to assess your borrowing power.

Paul Tsikopoulos is a credit representative 522646 of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237)

Home Loan Tips

Refinancing your home loan

A GNS Plus Lending Manager can review your current home loan to ensure you still have the right product for your needs. Don’t assume that just because your loan was once competitive, it still is. Interest rates change and different types of loans are always entering the market. They will:

• assess your current interest rate
• assess your repayment level
• assess your financial situation to determine whether a better deal can be sourced saving your money, and helping you pay off your loan faster

Tips to pay off your home loan faster

Select a home loan that meets your needs. While the rate is important, it is more important to have an appropriate level of flexibility and function.

1) Pay off as much as you can, as often as you can.

2) Avoid loans that penalise you for making extra repayment

3) Avoid ‘honeymoon’ loans that revert to a higher rate after the ‘honeymoon’ period is over.

4) Avoid loans with high exit costs.

5) Deal with reputable organisations

Fixed or variable interest?

This really depends on your current financial situation. A GNS Plus Lending Manager can help you select the right type of loan, building in the cost of every-day living to determine how much you can afford to repay each month.

There are advantages and disadvantages of choosing fixed and variable interest loans, and they are assessed on a per client basis.

Options to consider are:

• fixed interest loan
• variable interest loan
• loan comprising of part-fixed / part-variable interest

Remember however, that if you elect to split your loan into part fixed / part variable, make sure you don’t incur two monthly loan maintenance fees instead of one.

Hidden home loan costs

There are many costs associated with taking out a home loan, which don’t relate to the price of the property.

These hidden costs include:

• Lenders’ fees, including loan application and establishment fees
• Government charges including stamp duty on property purchase and mortgage, and title fees
• Legal expenses
• Inspection costs

Buying your first home

Buying your first home is one of (if not) the biggest financial commitments you will ever make. Stay well informed of what is involved so you don’t make any rash decisions.

Good financial planning advice from your Count adviser combined with the advice from a GNS Plus Lending Manager, can save you thousands of dollars off your loan and help you own your home sooner!

Can you afford to buy a house?

A credit provider must ensure you can afford to repay a loan without suffering undue financial hardship before lending you any money.

The total amount that you can borrow is determined by three factors:

1) The value of the property you intend to purchase; and

2) The funds you use towards the purchase; and

3) Your borrowing capacity or “serviceability”. Serviceability is your ability to meet loan repayments, and will depend on your income and existing financial commitments. You will need to provide evidence of a continuous stable income.

You must have a budget!

Budgeting your income carefully and understanding your spending habits will help you make regular loan repayments and own your home that much sooner!

Paul Tsikopoulos is a credit representative 522646 of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237)

But 7 out of 10 Australians do not have Income Protection Insurance – relying on the Australian attitude of “she’ll be right”. And for many Australians who do have some protection, its often not enough or structured in the best way to either maximise Tax deductions or minimise cash flow costs.

There are also so many different providers and options when it comes to Income Protection Insurance. And this is where GNS Group can help you.

We can understand what is important to you, how to best structure your protection and then compare different providers and policy definitions to make sure you will get a pay out when you really need it.

Some Insurance Companies get a bad reputation when it comes to paying out. And it’s probably the biggest concern people have. The 3 most common reasons for receiving what you expected are: Inaccurate/incomplete medical disclosure at the time of application A poor quality policy with weak definitions on how and when you will get paid Incorrect structuring of the policy to properly protect you.

When it comes to Income Protection Insurance – you get what you pay for!

The things that GNS Group will assist you with includes:

Appropriate Structuring (inside Super or personal policy) Waiting period (7 days, 30 days, 6 months) Benefit Period (You will be paid for 1 year, 2 years, 5 years, until age 65) Stepped/Level Premiums (Stepped premiums cost more every year you have a birthday, Level premiums do not increase with age) Agreed/Indemnity Value ( A bit like Car Insurance, Agreed Value gives you certainty, Indemnity or market Value is how much you are earning immediately before making an insurance claim) Super Booster/Mortgage Benefit (Something extra to help with the Mortgage or to pop into Super while you are not working to allow it to keep growing)

When someone purchases their first car, they make sure that they get the proper insurance. But when someone gets their first job, not many people even consider Income Protection Insurance.

Insuring a $40,000 car that reduces in value every year for $1,500 seems to be a good deal, but spending $1,500 to insure your $40,000 wage that grows in value every year is lower down the priority list.

5. Shares
Most of us have shares either owned directly or as part of our super funds. Being a shareholder means you are a part owner of a business, and as a result you share in the profitability of the company. If the business suffers a loss or even a expectation of a lower profit, then your shares can decline in value and can even become worthless should he company enter bankruptcy.

It is for this reason that shares are the most volatile form of investing, but history tells us that over the longer term, share based investments perform very well.

The trade off between risk and return is something that the team at GNS Group spend considerable time discussing with clients, and should only be considered for long term investments.

Shares will also pay out some of its profits as dividends. Profits earned in Australia will have been subject to company tax at 30%, and this 30% tax can be passed on to shareholders as an Imputation Credit or a Franking Credit, this is done to avoid double taxation.
The Financial Advisers at GNS Group can assist you with both share recommendations and placing the trades for you. As a trusted consultant, this is what we do regularly for our clients.

6. Managed Funds
These are a great way to increase diversification, by pooling your money with many other investors to access investments and markets that cannot be easily and cheaply obtained directly.

Whether it be to start off with a small balance, or to get exposure to a particular type of investment, Managed Funds play a role in most people’s investment portfolio.

Besides choosing the asset class – ie (Aust/International) shares, property (Aust/International), Fixed interest (Aust/Int), cash, commodities, infrastructure etc, it’s also important to consider the style of fund manager – Growth, value, income, active, passive etc. Each have their role to play and this is where a GNS Group Financial Adviser can add real value. We will understand what your goals are and how best to reach those goals through appropriate investing.

Selecting the right consultant to help you on your investment journey can be a challenge. We pride ourselves on our ethics and knowledge and always like to meet face-to-face with our clients (if they are based in Melbourne) in our Ivanhoe offices. However, if you are located interstate, a phone call to discuss your requirements is perfectly fine.

So how much is enough?

This is where working with GNS Group can make the process so much easier. GNS can cut through the fine print of different policies to make sure you get what you pay for, understand what is important to you, compare different policies and features and in most cases, there is no requirement to do a medical.

It is also important to understand the best way of owning your policy and funding the premium costs.

Should it be inside super or non super, what about your business paying the cost of the insurance? It is not just an issue around cashflow and who is paying the cost, but also tax needs to be taken into account as you might see a big chunk of your Life insurance payout heading to the ATO rather than your desired beneficiaries. This is where the GNS team can help to explain all of the different options and recommend the most suitable course of action for you and your family.

The 5 most common things you could consider salary sacrifice for include:

• Extra Superannuation
• Cars
• Entertainment and meals
• Phone/Internet
• Computers and laptops

So why would you even consider salary sacrifice? TO SAVE TAX!

How much tax you save depends on 3 things:

• How much you earn
• What expenses you package up
• Who you work for

Let’s look at these reasons a bit further.

1. How much you earn – Being able to get your taxable income down on the face of it sounds like a good thing. But this only really helps if you are able to get a concession or can eliminate having to pay Fringe Benefits Tax. It is this where the distinction between salary Sacrifice and Fringe Benefits Tax makes a difference. You see, the actual Tax in Fringe Benefits Tax is levied at the highest marginal tax rate.

So unless you are on the top tax rate (above $180k) you really don’t want to forgo you lower taxed wages in order to cop FBT at a higher rate.

2. so if you want avoid actually paying FBT, but are still open to the idea of Salary Sacrifice then you need to consider what types of expenses you package up:

• Extra Super is generally taxed at 15%, so you can really save some tax by putting away some extra money for retirement.
• Portable Electronic devices that you can predominately use for work purposes – e.g. laptop, iPad, phone etc. – are exempt from FBT if you can demonstrate their use for work purposes.
• Any other expenses which could ordinarily be used for work purposes e.g. brief case, Qantas Club Membership, Internet, study courses etc.
• Cars have their own special rules, and depending on the type of car, its value, how many km’s you travel each year, how many km’s are for work purposes etc. will determine the wide range of benefits.

These 4 key areas often give employees the most advantages but it really does depend on individual circumstances. Talking to a GNS Accountant will help to maximise your benefits.

3. The final piece of the FBT puzzle is who you work for. Most private companies don’t really want the paperwork headache of allowing their employees to package any expenses. It’s for these reasons that extra Super and cars may be all they are prepared to offer.

But besides private companies, special rules apply if you work for a charity or a public hospital (public benevolent institutions). The Government allows very generous FBT concessions and exemptions to workers in these types of organisations, which can save thousands of dollars in tax each year.

These benefits will often see employees package up rent/mortgage payments, credit cards, private health insurance, private school fees, holidays, meals/restaurants etc.

As you can imagine, being able to get those types of expenses paid before tax is a big advantage and it’s vital that you get professional advice from a GNS Group Accountant to make sure you maximise your FBT Concessions.

Either way, it’s important to make sure a few basics are followed to maximise your return:

• Keep everything (original or soft copy) throughout the year that could potentially be claimed (we have checklists to help)
• Try to summarise all of the documents and records, it will make our life easier & your accounting fees cheaper!
• Book an appointment at our Ivanhoe office and talk to your GNS accountant about what might have changed in your world over the past 12 months (there might be extra things you can claim)
• Ask questions about what might have changed with tax legislation affecting your claims
• Provide GNS with your current contact details; perhaps you have moved from Melbourne to rural Victoria, or interstate, or visa versa. (in case there are some queries)
• Let us know your bank account details for an Electronic Deposit of your refund
• Book a face to face appointment (if you are based in Melbourne) or a phone based consultation (to cover all of the above)

There are three key areas on a tax return – Income, Deductions, Rebates & Offsets.

Income

This could include things such as your salary, bank interest, capital gains, rent received, dividends or managed funds etc.

Deductions

This could include things such as your car or travel costs, union or subscription fees, rental property expenses,  Interest on investment loans, Income Protection Insurance, home office costs etc.

Rebates & Offsets

These are generally things which entitle you to a tax credit, and can include Private Health Insurance, Out of pocket medical expenses, credit for foreign income tax paid etc.

If you would like more information on what you might be able to claim, talk to one of our accountants today – we’d love to be able to help you.

Not only clearing your debts (home loan, credit cards, and business loans) but also seeking the best available medical treatment become big priorities. And this is where Total and Permanent Disability Insurance can take the financial headaches away and allow you to focus on adjusting to your latest medical impediments.

You have to remember that getting a lump sum payment from Total and Permanent Disability Insurance means a life changing diagnosis has been made; it’s not just a broken arm!

Things such as Quadriplegia, paraplegia, Multiple Sclerosis and Motor Neuron Disease. Medical conditions which there is no recovery from – Its Total and also Permanent.

As you can imagine, the cost of modifications to your home, perhaps even changing homes, might be required depending on the degree of impact and the way your home is set up. The cost of personal in home care might start to bite, and is often not covered by the cost of health insurance and wont be picked up by Medicare either.

So you need to look after yourself and your family, and when you do the sums, its not a big cost relative to the benefit that you would receive in the event of being diagnosed as Totally and Permanently disabled.

GNS Group can’t prevent these tragic illnesses or injuries from occurring, but we can give you and your family the peace of mind that you will not be a financial burden on them.