- Financial Advisory
- Credit Advisory
- Estate Planning
- SWU Online Invest
Nov 07 , 2021
Despite superannuation being the largest asset most Australians hold, many are not prepared on how to pass it on to the next generation.
SMSFs members need to take precaution in passing on their money. It’s a separate trust or function that needs to be dealt with very separately from their will. We think some people don’t understand that and think it forms part of their estate.
That preconception that you don’t have to separately deal with your superannuation needs to be busted.
We warn SMSF holders that the trustee has enormous powers when it comes to deciding who gets what, meaning it is vital to choose the right person.
In terms of a SMSF, the trustees of the fund make a determination as to where the superannuation should be paid, factoring in all beneficiaries and their financial situation.
In this situation it is largely taken out of your hands and it’s people making that assessment without necessarily your intentions in mind.
You must have a clear and strong estate plan that deals with all the issues that might arise, with a lot of family situations that could be at play.
For instance, there’s a classic case of a blended family where the benefits of the first to die intend to pass to the children from the first marriage.
Some useful strategies might be to ensure there’s a binding death benefit in place and you might have a child or independent person appointed as a director and they become a shareholder involved in decision making.
Even members who are not anticipating issues should plan their estate to ensure their wishes are met. As a general rule, everyone should be making sure they thoroughly review their superannuation details irrespective of whether they see an issue or not.
Don’t take for granted that your superannuation is just dealt with. A lot of people can’t really remember signing a nomination or having really given it a great deal of thought. They just think their superannuation forms part of their estate and that is something that doesn’t happen.
When that is in many instances the largest assets you have, some due diligence is required. Speak to your adviser today to discuss estate planning options and how to protect your beneficiaries inheritances for the future.