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What happens if someone dies without leaving a will in NSW? Does it affect the money going to the spouse and family of the deceased?

What happens if someone dies without leaving a will in NSW? Does it affect the money going to the spouse and family of the deceased?

If a person dies without leaving a will, the estate will be subject to the laws of intestacy, which vary from state to state. In NSW, if someone dies intestate, the priority order in which funds go to living relatives is: the spouse alone if there are no children and then to spouse and children and then to children if there is no spouse. This is why it is important to seek legal advice and have a valid will to ensure that the proceeds of your estate go to your preferred beneficiaries.

My wife and I are 65, we work part-time and have no children. Our house is five years old, and close to a beach and golf club. We have $180,000 left on the mortgage. We estimate its value at between $600,000 and $800,000. It's the perfect retirement home and we don't want to leave. With no one to leave it to, how do we best capitalise on it before we die? We've thought of selling the house for $400,000 as a future investment for a buyer. The buyer would allow us to live there until our deaths, then the investor gains a property that would potentially be worth $1 million dollars. This would be a 20-year, $400,000 investment that would net the buyer a healthy return. Is this something people do? Do you have any other suggestions that would allow us to capitalise on our investment before we pass over to the happy hunting grounds?

It's great that you love where you are, but experience tells us that people's situation can change rapidly. For example, one partner may suffer a severe illness or death, which requires a move to a different residence. I would rather see you remain where you are and work as long as possible to get the mortgage out of the way. Then when you are older, you could consider a reverse mortgage if you are still happy to live there.

I'm 47 and work full-time with a salary of $92,000. My wife, 49, works on a casual basis. We have two children, one is in year 7 at a private school and the younger child will go to the same school in 2014. Our house is paid off and we have two investment properties with total outstanding mortgages of $242,000. We have shares valued at $25,000. I'm in a defined benefit super fund with a balance of $400,000, I contribute via salary sacrifice, and my wife has $110,000 in super. We have no other debts. I plan to work until I'm 59 or 60. Will I have enough to retire then? We have a modest standard of living and most of my savings for the next eight years will go towards school fees and a new car. I then plan to put additional funds into my super fund. Am I on the right track financially or should I be doing something differently?

How much you need when you retire depends on a range of variables that include the rate of inflation, the state of your health, how long you live and how often your children put their hands out for help from you. You have done extremely well to date but at this stage in your life, you should be forming a relationship with an adviser who should help you clarify your goals and work out strategies to reach them.

I have been made redundant and will need to relocate interstate for a new job. I owe $400,000 on my house and still have a five-year fixed-term loan at 8.9 per cent. Am I better off to sell now or try to rent my house out as well as paying rent interstate? If I rent my house for $400 a week, I will have a shortfall of about $600 a week. On my new wage I will just be able to afford this, but don't know which way to go. If I sell I will have to pay break fees and will no doubt walk away with debt.

Make sure you bear in mind that the interest will be tax deductible, even though the rents are assessable, so the government will be paying at least a third of it. If you are a bit strapped for cash, you can sign a form requesting that your employer reduce your PAYG tax to take account of your rental property tax deductions. I suggest that you hang on to your property if you can, because you will lose a big chunk of capital if you have to sell it, pay the break costs and eventually buy again.

Advice is general readers should seek their own professional advice.

Contact noel.whittaker@whittaker macnaught.com.au. Follow him on Twitter: @noelwhittaker. Questions to: Ask Noel, Money, GPO Box 2571, Qld, 4000, or see moneymanager.com.au /ask-an-expert.

My wife is 55, retired and received a small inheritance late last year. She placed a portion of it in her super. Is she able to claim this deposit, or part of it, on her tax return for this financial year? She receives her super pension as a fortnightly payment. Do you have to go to an accountant to do this, or is it simply an entry on the tax return form?

Provided no employer was paying super for her in the current financial year, she may be able to claim up to $50,000 of the contribution as a tax deduction in 2011-12. I suggest you consult your accountant, who will help you decide what is the appropriate amount to claim as a tax deduction she is allowed to split the contribution into deductible and non-deductible portions.

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