Speaking at a NSW state chapter event for the SMSF Professionals’ Association of Australia, Townsends Business & Corporate Lawyers’ Michael Hallinan suggested providing justification for a death benefit nomination could create grounds for contention.
He said the reasons offered for nominations can be seen as unreasonable, therefore exposing a trustee to analysis or criticism.
“If you don’t give reasons, you’re not giving the people who are trying to challenge ammunition,” Mr Hallinan said.
“If you think those reasons would be accepted by a reasonable person, then fine, but if you have an enquiry about whether a reasonable person would find those reasons convincing or acceptable, then it’s probably better to keep quiet.”
Mr Hallinan stressed that this is a general rule of thumb and is subject to exceptions, in particular if certain people have been excluded for good reason.
He gave the example of a trustee excluding person ‘x’ on the basis that ‘x’ had been provided with a lot of financial assistance during his life, compared to the nominated beneficiaries.
“That would be acceptable, but if you said ‘x’ was in a same-sex relationship and I take [offence] to that, then to justify the exclusion of ‘x’ on that basis is probably… going to be seen to be unfair and an unacceptable basis for exclusion.”
There was a ready who just hit the nail in the head there. Of course the whole purpose of a super fund is to benefit the retiree or beneficiaries.however everyone else is trying to put a hand in the pie before the actual beneficiary gets any benefit that is ATO, lawyers, accountants, financial planners/auditors.
Here it is the piece of the pussle government should look at it carefully. Surely the objective should be the primordial reason for super funds.”provide retirees with an income”. not a cake for the party goes.
That was a great session, tough going as complex but and some timely reminders that some times “less is more”. These sort of sessions with interactions of Lawyers , Accountants. Auditors and Financial Planners show are great for getting to the nitty gritty of the detail and how implementing some of these strategies takes care and attention not just a one size fits all BDBN.