CBA research points to potential planning disaster

New research has found over half of SMSF trustees have significantly inadequate estate planning provisions in place.

The Women and SMSFs report, jointly released by CBA and the SMSF Association, indicated that over half of SMSFs don't have an updated will or a succession plan.

Speaking at the launch of the report, CBA head of SMSF customers Marcus Evans said that while 78 per cent of SMSFs have a will, only 49 per cent actually have one that’s up to date.

The research report surveyed 801 SMSF trustees as well as 535 individuals without an SMSF, and investigated the behaviours, confidence levels and outlook for different SMSF trustee demographics. 

“This is a key area that the whole SMSF community needs to have a good look at,” said Mr Evans.

“Given the complexity of the funds, the complexity of the inter-relationship between wills and trust deeds, the incidents of blended families, this is a complex area that you need good solid advice and yet we have at least 50 per cent acknowledging they have a gap.”

Mr Marcus said the report also indicated that only 53 per cent of SMSF trustees have an estate plan in place that covers their family if they or any other trustees in their SMSF were to die suddenly, and that only 40 per cent had a succession plan in place.

Also speaking at the event, SMSF Association chief executive Andrea Slattery said these statistics show there is a need for greater specialisation from practitioners in order to provide clients with a broader range of services and for them to create networks of other professionals of whom they can outsource certain advice to.

She warned practitioners, however, on the dangers of making changes to wills or deeds without consulting a lawyer.

“It is really important to get a lawyer involved because it’s actually a legal service and if you’re drafting a deed or clauses in a deed and you’re not a lawyer, then you’re actually breaching a legal obligation,” said Ms Slattery.

However, Mr Evans said, the report did show some more encouraging statistics.

According to the research, 91 per cent of SMSF trustees were confident that following a separation or divorce and their partner ceasing to be a trustee, they would have sufficient knowledge to take over sole responsibility for managing their SMSF investments.

Read more:

Trustees' take-up of global equities spikes 

AMP Capital calls for calm on credit crisis fears 

promoted stories

SUBSCRIBE TO THE SMSF ADVISER BULLETIN

News

Strategy