Masterclass SMSF – How Super Death Benefit Nominations work for complex estate plans

Masterclass SMSF – How Super Death Benefit Nominations work for complex estate plans

SMSF – How Super Death Benefit Nominations work for complex estate plans

Our previous post talked about the basics of super death benefit nominations, how tax applies and how they work in general. However better self-managed super (SMSF) trust deeds should allow more complex estate planning strategies that include death nominations to multiple beneficiaries or specific asset allocations especially with prior and mixed marriage situations.

As discussed in the previous post, most common SMSF deeds allow simple binding death benefit nominations (BDBN) as a default document that allows little more than nominating one or more individuals to receive a benefit. And a basic nomination is usually the ONLY option available for members of large public offer funds. But these don’t allow for a beneficiary pre-deceasing a member, or leaving specific assets to certain beneficiaries.

For more complex situations, as part of estate planning (remember super does NOT form part of your estate and is NOT controlled by your will directly) a greater range of possibilities should be sought. This would seek to cater for situations such as –

  • Benefits to multiple beneficiaries
  • Allocation of benefits to alternative beneficiaries where one or more pre-decease a member
  • Allocation of specified assets to specified beneficiaries

Some examples to illustrate the possibilities –

A.     Margaret holds collectable assets in her SMSF, and constructs a BDBN that directs specific assets to certain beneficiaries, and the remainder to another beneficiary, as follows –

  1. A Monet to son Peter
  2. A Ming Dynasty vase to daughter Heather
  3. Remainder to husband Phil with a condition that should he pre-decease her, or is no-longer her husband, all remaining benefits will pass to Peter and Heather in equal proportions

B.    Matt and Marsha, with Marsha’s son from prior marriage, Steve, who may not be a dependent of Matt’s at Matt’s death, so Matt prepares a BDBN as follows, that in event of his death, benefits pass as follows –

  1. First to Marsha
  2. Secondly to Steve, if Marsha pre-deceases Matt, with a condition that it is paid ONLY if Steve is a SIS Act dependent at the time
  3. Thirdly to Matt’s legal personal representative (LPR or estate) – here they can then pass to Steve under provisions of Matt’s will.

As each situation is different, speaking to an advisor is recommended.

If you require an advisor, call us to arrange a no-obligation discussion.

Got questions? If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and Youtop right hand side above.

If you have any questions, why not give us a call – it’s FREE also! No obligation.

0407 361 596, Paul.

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Self-Managed Superannuation Service Providers in Australia. SuperBenefit will SET UP your SMSF and provide investment education for a better result. We take care of all your administration, accounting, ATO lodgement and audit of SMSFs, working with you and your advisors. If you want advice we can arrange one of our recommended advisors and accountants to meet with you, as we do not give advice, but take instruction only. Take control of your super, including property shares and other assets. Learn how to be your own advisor - make better decisions - by being mentored and coached to invest your own super wisely and strategically by qualified partners. Book to come to an event to find out more, or - Call us 0407 361 596, no obligation FREE strategy call.
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