Hi all
I am a little confused with the idea of drawing on equity and utilising it on lifestyle expenses instead of more investment.
how does it work?
are there future implications for me as successor if my parents currently do this?
what if any planning should i prepare in the event they pass away?
should i discuss with them about implications on my future financial position – if any?
thanks all. i’m kinda blur about the details regarding this.
Alex[blush2]
Answers come from the courage to ask
I suppose it depends on how much and how fast you withdraw the equity. If your portfolio is growing at $100,000 per year, and you only take $80,000 you should be right. But have to plan for years with no growth too.
Do a search on Steve Navra for his ideas on this topic.
One potential problem is if you are withdrawing from an investment to fund lifestyle, then die, your estate may have to pay CGT, but the remaining equity may not be enough to cover the CGT.
Perhaps a good life insurance policy would be a good idea.
Terryw
Discover Home Loans
Parramatta
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