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PKF Tasmania

Chartered Accountants and Business Advisors

SMSF and Estate Planning

SMSF and Estate Planning

Integrate the SMSF into your estate planning

Your superannuation entitlements can be a significant part of your overall wealth.  It is not widely known that your superannuation entitlements are not automatically controlled by your will. In fact, the trustees of the superannuation fund are quite entitled to completely disregard your intentions unless they are in the specified format.

SMSF and Wills

One of the worst examples of this was outlined in the case of Katz and Grossman in the New South Wales Supreme Court. In that case, a man specified in his will that his superannuation entitlements should be split equally between his son and daughter. Unfortunately for his son, the man’s daughter acquired control of the SMSF after his death and paid all his entitlements to herself.

This is an extreme case but shows the danger of not providing a direction to the SMSF which is legally binding. It is now possible for intentions regarding entitlements to be made legally binding on the trustee of the SMSF but other issues arise. Who will be the trustee of the fund after you die and how will you structure your binding direction?

SMSF Payments to Dependants

There are other issues arising from SMSF entitlements because there are rules about who can receive your entitlements as a pension and who may receive them as a lump sum. There are also different rules about how much tax is paid on the entitlements depending on who receives the money and in what form.

These and other issues need to be resolved in the context of overall estate structuring and ongoing management.


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