POWERED BY MOMENTUM MEDIA
BDBN more important than a will
The most important estate planning tool is a binding death benefit nomination (BDBN), not the will, according to Townsends Business and Corporate Lawyers.
Townsends' special counsel for estate planning and superannuation, Brian Hor, said as wealth in superannuation and self-managed super funds (SMSFs) is held in one or more separate legal entities, you do not personally own the wealth.
"The trustee of the fund has the discretion over the payment of benefits from your super fund," Hor said.
"In many cases, your super instructions will override your will, and your will cannot deal with your SMSF interest unless the trustee of the fund, in its discretion, decides to pay the superannuation interest to your deceased estate."
Hor said although many public super funds permit a member to make a death benefit nomination it must be binding to provide certainty, and ideally should be non-lapsing.
"A BDBN is especially useful in the context of a SMSF, because what might be achieved through the use of a BDBN for estate planning purposes is limited only by the trust deed for the fund," he said.
"It may be possible to create a BDBN that can implement special and creative strategies for SMSFs, such as creating a life estate over the superannuation interest in favour of your spouse, or providing for contingencies."
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
3
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
