Masterclass SMSF – Why is the trust deed the most important document when a member passes away?

Masterclass SMSF – Why is the trust deed the most important document when a member passes away?

SMSF – Why is the trust deed the most important document when a member passes away?

The SMSF trust deed is the first and most important document when a member passes away as it has the rules and determines how the death benefits are distributed. The trust deed sets out how death benefits are treated, especially if the deceased member had left conflicting instructions, but primarily because super is NOT part of an estate unless directed to go there.

In one complex example, an SMSF member signed a binding death benefit nomination signifying the sole recipient of their death benefit was to be their legal personal representative, that is, their estate, while also having a reversionary pension in place – but what was contained in the trust deed would determine the final outcome. Many deeds say that a binding death benefit nomination takes precedence over a reversionary pension, and others choose to go the other way. If the rules of the trust deed and governing rules of the reversionary pension were set up properly, the binding death benefit nomination would play a secondary role.

However, if the deed could not resolve the issue, court proceedings might arise as a result, so to avoid the heartache and costs for the trustee and the potential beneficiaries in the future, it is recommended that trustees conduct an immediate review with their advisors determine what is allowed, but also if any member had both a reversionary pension and a non-lapsing binding death benefit nomination, and find out if they were consistent, which arrangement might prevail under the trust deed and amend the trust deed if necessary.

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.

See our next seminar/webinars 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. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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