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Protecting your superannuation death benefit - why a binding nomination is not enough

R.B. Flinders explores the pitfalls and control measures involved in ensuring your super gets to those intended.

Despite case after case exposing the constraints of superannuation death benefits, the message doesn't seem to be getting through.

Your Will does not automatically deal with super.
Your super is NOT an estate asset.

The common fall back measure for a super fund member is to rely on a Binding Death Benefit Nomination, which we know are not always the perfect solution, even if they are perfectly drafted and executed.

R.B. Flinders explores the pitfalls and control measures involved in ensuring your super gets to those intended, in this article published in the Jan/Feb 2016 issue of the Law Institute Journal.

Some of the key takeaways from the article include:

  • Although not automatically an estate asset, contemplate your super when drafting your Will and keep it as a separate asset in the event it is paid into your will/estate. This provides a means to channel to tax dependent/s via a superannuation death benefits trust and ring fences those funds from the debts of a bankrupt estate.
  • Consider tax efficient bequests such as leaving non superannuation benefits direct to your non-tax dependents.
  • Ensure asset protection is considered in relation to superannuation death benefit payments where your estate may be challenged or a recipient may be “at risk”.
  • It is critical to understand who and how your SMSF will be controlled should you die or become incapacitated.
  • Binding Death Benefit Nominations are helpful – but not the complete solution.
  • Foresee incapacity – establish an Enduring Power of Attorney (Financial) to assist in the control and continuity of your SMSF.

Click here for the full article.

For more information on managing your superannuation death benefit, Binding Death Benefit Nominations or estate planning generally, contact David Patkin on 03 8673 5529.

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