How to Avoid Bank Death Duties
When the 15per cent tax on payments of taxable superannuation to non-dependents, upon the death of a superannuation fund member, was introduced there was an outcry of this being a death tax. For unwary SMSF members, and for that fact all Australians, a policy of the big banks can effectively result in a death duty.
When a member of a couple dies, and the will clearly states that all their worldly possessions are to pass to their partner or spouse, there is no legal requirement to obtain probate.
However where a person dies and they had investments solely in their name, such as shares through a share service, the surviving member of the couple can be forced to pay for probate to be granted.
For some reason the major banks have imposed a limit of $15,000 on the value of a share or shares to be transferred into the name of the spouse, that do not require probate to be granted when there is only one name shown on their records.
This means where a share or shares are owned in the name of a husband, those shares are owned through a share service such as Commsec, the value of the shares is more than $15,000, they die and leave everything to their wife, despite not being required to obtain probate the wife will be forced into the expense of gaining probate to transfer ownership of the shares into her name.
Apart from agitating the government and the other relevant regulatory bodies, for people who want to avoid this unnecessary cost, they should approach the share service or administration for other investments they hold in their own name. A request needs to be made on how they can have their spouse or partner registered to be able to deal with the shares upon their death.
If the big banks were reasonable they could instead require a copy of the will to be lodged with them for review. After checking that all assets are to pass to a spouse the transfer should then able to be affected without requiring probate to be granted,