If you are relying on your Will to protect your wishes for your super in your super fund or SMSF, this tip is for you.

A Will only covers your personal assets, so your super could be open to litigation or governmental jurisdictions.

You need an Estate Plan, not just a Will. An Estate Plan is an overarching plan to manage your wealth as per your wishes after your passing. Having an Estate Plan in place helps avoid conflict or litigation, while also considering associated costs and appropriate structures for wealth distribution to your beneficiaries.

When it comes to super, your Estate Plan should consider:

Super in Employer Funds or Retail Funds
Most retail and employer funds allow a binding death benefit nomination, meaning the member can nominate who should receive their superannuation upon their death. Without a binding death nomination in place, the decision about the distribution of superannuation benefits is left to the Superannuation Fund Trustee. A comprehensive Estate Plan can help you articulate where your superannuation benefits will go, consider tax consequences for your beneficiaries, as well as manage the proceeds of any life insurance policies held via superannuation.

SMSFs
As part of your overall Estate Planning process, it’s vital for a qualified SMSF professional to review your SMSF Deed to check compliance with regularly changing tax laws and to make the most of any tax-effective strategies available. It's important to note that the members of the SMSF are also the Trustees of the fund, and in most cases, the continuing Trustee of the SMSF will decide how a deceased member's benefits will be treated.

SMSF Members and Trustees do not have access to the Superannuation Complaints Tribunal and must resolve their own complaints, making it even more important to plan ahead when it comes to distribution of your benefits to avoid costly legal representation.

Your Estate Planning should include a regular review of your SMSF to ascertain that it is still relevant for your situation, including matters such as:

What type of death benefit nominations should be used (binding or non-binding);
Whether the parties nominated as beneficiaries are appropriate;
The tax consequences of your nominations (for example the $1.6 million Transfer Balance Cap, passing reversionary pensions to a spouse, or the tax treatment for assets held in joint names); and
Whether all superannuation entitlements (including entitlements from insurance policies) are covered by the nomination.

Estate Planning can be complex, but it is vital to protect the wealth you have worked so hard to accumulate. An Estate Plan can help to clarify your wishes to avoid conflict or litigation after your passing and, importantly, avoid disadvantaging the ones you love. We can work in collaboration with other key stakeholders such as your solicitor and accountant to develop an Estate Plan which incorporates your overall financial objectives.

If you would like advice on Estate Planning, I encourage you to contact us on 07 3720 1299 or email admin@wealthfundamentals.com.au.

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Lane Moses Pty Ltd ABN 56 092 186 117 trading as Wealth Fundamentals and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.

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