Superannuation and Estate Planning

Superannuation and Estate Planning

What do I need to know about Superannuation and Estate Planning?
  • Superannuation is becoming a bigger part of Estate Planning and is as equally important as your Will.
  • Because Superannuation doesn’t automatically form part of your estate (it is dealt with in accordance with the terms of the fund) this creates estate planning opportunities.
  • Because separate to your estate, no claim can be made if a binding nomination made to person other that your estate
  • Can pay superannuation in tax effective way and have equalization clauses in your Will
  • You must keep your superannuation up to date
Who can I pay my superannuation to?
  • Dependents as defined under the Superannuation Industry (Supervision) Act
  • Spouse, Partner, Children
  • Those in an interdependent relationship must be financially dependent
  • Your estate
When will I be taxed?
  • If payable to spouse, no tax
  • If payable to child under 18, no tax
  • If payable to child over 18, likely to be tax (because not a tax dependant)
  • If payable to you estate to go into a discretionary trust for spouse or child (even if under 18) tax
What about for a SMSF (Self-Managed Super Fund)?
  • All of the above applies, however you must also deal with Control of the SMSF as a part of your estate planning.
  • Provisions in your Will will not bind the SMSF – it’s all about Binding nomination and control.

Different Superannuation funds offer different policies. You must check your Super Fund to see if it allows:

  • Binding nominations – bind the Super Fund
  • Lapse after 3 years
  • If invalid does not bind the Super fund
  • Non-binding nominations – Super fund may decide to whom your superannuation is paid

Contact us now at Danaher Legal for more on Superannuation and Estate Planning