SMSF trustees must place greater importance on their estate planning arrangements and engage with a professional adviser, otherwise they could experience pitfalls and expensive court cases due to incorrect documentation.
“One of the biggest issues is the actual need for estate planning with super because most trustees are mistaken in the fact that they think their superannuation is dealt with under their will, which sits outside of super,” SMSF Design chief executive Tracey Besters told selfmanagedsuper.
“So trustees really need to consider what they want to see happen with their super once they’re no longer here.”
Besters added it was imperative trustees engaged with a professional who specialised in estate planning.
“Estate planning with an SMSF is more than just filling out a form; it’s actually a strategy so they need to think about it from a strategy point of view,” she noted.
“There are several cases sitting in the tribunals and the courts because documentation has been completed incorrectly.
“So it’s an absolute must because if the paperwork is completed incorrectly, what you think might happen or what you want to happen may not happen at the end of the day.”
She said estate planning was not a priority for many trustees.
“It’s not something that trustees are thinking about when they’re establishing their SMSF,” she said.
“Most trustees are establishing their SMSF for the growth and retirement mechanisms of the super fund; they don’t necessarily think about the estate planning aspects.
“But as super grows, and the average balance in an SMSF is $1 million now, it’s vitally important to ensure that the money ends up where we want it to go at the end of the day.”
Besters will be presenting a session on estate planning at the selfmanagedsuper SMSF Trustee Empowerment Day 2016 in Sydney, Brisbane and Melbourne, kicking off from 12 September.