Total & Permanent Disability (TPD) Case Study: Why engage a financial advisor?

Financial advice can assist with navigating the complexities of managing a TPD payout, with the primary objective being to minimise the tax payable.

This case study illustrates the critical role financial advisors play in helping individuals make sense of the complexities associated with these insurance payouts.

Overview

Our client faced a life-altering event, suffering a debilitating injury that rendered them eligible for a Total and Permanent Disability (TPD) insurance payout of $170,000 (this totalled the client’s account balance to $370,000) in their superannuation fund. This substantial sum aimed to provide financial security during a challenging period. However, such windfalls can be bewildering, leading many to seek guidance. Typically, lawyers recommend engaging a financial advisor to navigate the complexities of managing this significant payout, with the primary objective being to minimise the tax payable.

Client Referral

Recognising the intricacies involved in managing personal injury payouts, we partner with legal professionals in a collaborative approach. We ensure that your clients receive expert financial advice, and are therefore able to make informed decisions about their financial futures.

Our Approach

Our initial approach is to gather all the pertinent information from a superannuation fund(s), where the TPD insurance payout was held. With this data in hand, we can provide the client with factual information about their options moving forward. This includes providing a calculation on the estimated tax payable from their Superannuation account.

An example of how we have recently assisted a client is shown in the following table:

Our lifeVantage advisors were able to assist this client with understanding their options to access these proceeds and the associated tax implications. In this case, our client had saved 12.6% of Tax, equating to almost $47,000 in their name. The collaboration between legal and financial experts ensures clients receive comprehensive support during challenging times.

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Make an appointment with our lifeVantage experts to find out more about how we can assist you or your clients.

Disclaimer: The information discussed above is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. The tax examples discussed are for illustrative purposes only. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information.

Vincents lifeVantage Pty Ltd ABN 88 658 133 709 is a Corporate Authorised Representative of Vincents Advisory Pty Ltd ABN 79 125 596 349. AFSL No. 320580.