POWERED BY MOMENTUM MEDIA
Estate plans must include SMSFs
Estate plans involving a self-managed superannuation fund (SMSF) must first decide whether giving the surviving trustee or trustees discretion to determine the recipient of a death benefit in the SMSF is the best answer, a law firm believes.
The firm said estate plans worked when there were no disputes after a client died and the outcome was best achieved by understanding that there was "no one fits all size" solution.
Cooper Grace Ward law firm partner, Scott Hay-Bartlem, said letting a trustee make the decision after death was often the best answer as the right decision could be made with the benefit of hindsight.
"Equally there are situations where allowing the trustee to choose as they please after death is not going to achieve the result the client wants, and then we need to work out how best to remove the trustee's discretion and lock in the decision," Hay-Bartlem said.
"If fund members decide to choose a binding death benefit nomination (BDBN), then it's absolutely vital to follow the deed precisely, or else the BDBN can be useless. There are a multitude of factors in deciding who to nominate under a BDBN, including whether the recipient is likely to be sued and the risk of an estate challenge.
Hay-Bartlem noted that there were other alternatives to BDBNs such as if a pension should be reversionary, tailoring the trust deed, and having separate SMSFs.
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
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
