Estate Planning

For many people, superannuation is often their largest asset aside from the family home. Therefore, an important consideration is how your remaining superannuation will be distributed to beneficiaries following your death. Questions routinely asked are usually along the lines of Who will inherit my money? How much tax will be paid? How do I protect my assets? Depending on your estate planning requirements, we will guide you through the process and partner with your own lawyer or one of the lawyers on our panel (specialising in the area of estate planning) in order to help achieve your desired outcome.

What is Estate planning?

Estate planning essentially involves creating a plan to distribute assets tax-effectively to your intended beneficiaries upon death. Having this plan in place ensures your intentions have the best chance of success and allows a smooth transition of your wealth to the next generation. Your superannuation entitlements in your SMSF are not dealt with under your Will because an SMSF is legally regarded as a separate structure. Hence, as a minimum you really need-

- A SMSF estate plan which deals with your superannuation.

- A Will.

Why is it important to consider my SMSF in the estate plan?

In general terms, the trustees of an SMSF are responsible for making decisions for the fund.

Establishing an SMSF estate plan gives you comfort that the trustees should abide by your wishes on how, and to whom, your death benefits will be paid.

If no SMSF estate plan exists, the trustees of your SMSF are basically free to apply their discretion as to the payment of your death benefits. 

How can I start estate planning for my SMSF?

Preparing an SMSF estate plan is an intricate process and typically involves a number of professionals working together to help you make informed decisions about distribution of your super on death. The most important element of an SMSF estate plan is you. Professional advisers need to hear your story and understand your wishes. Also, being clear on your intentions helps minimise the costs of preparing the plan.

  1. A great way to start the process is to sit down and write out the following:
  2. Map out your family tree with birth dates for all.  
  3. Note down your relationship to each person (spouse, child, step-child etc.).
  4. Consider whether any beneficiaries have special considerations or needs, such as:
    • disability or intellectual impairment;
    • drug, gambling or an inability to control their finances; and
    • whether you currently provide support for relatives (e.g., grand children, parents or adult children).
  5. Write out where you want your super to go on your death.
  6. Although it may be uncomfortable, you need to consider different death scenarios and how they impact on your plan – such as if you and your spouse both die at the same time. Alternatively, what if your whole family dies together? List where you want your super to go in each scenario.
  7. Note down those people you trust to carry out your wishes on your death.
  8. List down anything else you deem important.