A Week in the Life: Who are they going to call?

There is nothing like legislative deadlines to liven things up around the place.

Bruce and Dianne hit the phone as soon as the news broke that the assets test for complying pensions was changing.

Dianne is always going on about the Government trying to hurt “the little people”. Bruce just nods a lot. We have been working with them on some sensible retirement planning for about five years given that Bruce will be 65 this year and is still working.

Dianne, who is 61, has not worked for a few years because she is apparently in poor health — often questioning “why the Government picks on women” with the increased age for pension eligibility.

There is an idea going around the office that Bruce likes to go to work for a bit of quiet, but he is not that well now either, so retiring is probably a good idea.

So, finally we have their attention and are able to sort out a sensible solution for them — a mix of annuity and allocated pension.

Meanwhile, Jean, whose emergency estate planning we performed last month before the death of her mother (MM, August 5), has come back in and told us her father George has died.

This is pretty tough for Jean because her mother’s estate has not been settled yet and now she has to deal with her father’s as well.

We had sold the family home to fund the aged accommodation for George, so at least the majority of the assets are mainly listed and fixed interest investments. Because Jean had power of attorney, we had recommended that all the assets be put on a trustee company administration service. The trustee company will help Jean get through the estate work.

One good outcome for Jean is that she is the only beneficiary, so her financial situation will ease quite a bit. We are now in the middle of discussions about what she wants to do in the future. The job scene is not promising in her field at the moment, so she is thinking about working for a charity because her salary is not as much of an issue now.

On Monday, we received a frantic call from a woman who got our name from someone she met 10 years ago and “had to see us now”. I cancelled my haircut so we could fit her in.

In bounces Peta, uptight and wanting answers right away. She is not interested in giving us much detail about her circumstances, except that her accountant told her that the rent for her office was not tax deductible.

So after ringing a few accounting firms that send us business from time to time, I found one that would make an appointment for Peta and sent her on her way. We have had several calls from Peta since then wanting referrals to property experts, lawyers and a good real estate agent. We started to feel like a division of the Yellow Pages, which in the end is what we suggested she consult to find businesses near her home.

A couple of referrals have come in and it has been fun working on portfolios for some people keen to save money.

Trevor is a senior executive in a public company. He wanted to save for his retirement, which is in about 20 years time, so we looked at his options. He is certainly a good saver — different from many we see in similar jobs.

He is in a defined benefit super fund, so even with his salary sacrifice there is limited value in adding more. It seems his father had a few whole-of-life policies and had been talking to him about them. So what does Trevor want?

He wanted whole-of-life policies for his wife and himself. We gave him some quotes and thought he was happy. Apparently not — he wanted to put more into them. That is certainly a change from the usual. After working on some school fee funding and sorting out the share portfolio, he is a happy customer.

We also had a call from a lawyer with clients in trouble — Paula and Eric are involved in litigation over a business they sold some time ago, and also happen to have a self-managed super fund (SMSF). Their accountant was administering the fund for them and providing investment advice. Unfortunately, he had not made sure the fund was compliant. And we could not find any investment strategy at all.

With no clear understanding of the super fund by either of these dear souls — except that it pays their pension — it was very difficult to get a clear view of the situation. Their son tried to help, but was also confused, so what could we do?

After discussions with the lawyer, we suggested that these folk really did not have the skills to be their own trustees, especially as they were both over 73, and one of them was legally blind and clearly unwell.

So we are now in the process of appointing a public trustee to their super fund. We suggested they give their son power of attorney, but he says he is “not flash at paperwork”. We hope he will take it on, but wonder how he will manage under new Victorian legislation for powers of attorney.

Paula and Eric are both frightened about the pending legal matter and do not need additional worry over their super fund. It is their only source of income and there is no hope of any Centrelink benefits.

We have had a couple of clients lately who are managing the complications of these so-called self-managed superannuation funds.

Becoming an incompetent trustee because you have lost legal capacity is a dire situation when you are totally reliant on the pension being paid to you from the fund.

Jennifer Moss is director of Moss Financial Services and an authorised representative of Meritum Financial Group.