Separate SMSFs underutilised in estate planning

Separate SMSFs underutilised in estate planning

The use of separate super funds as an estate planning strategy is rarely considered by SMSF practitioners despite the fact that it can be the most appropriate strategy for certain clients, says an industry lawyer.

Cooper Grace Ward’s leader of commercial work group, Scott Hay-Bartlem, says cases such as Wooster and Morris demonstrate that for certain clients, simply splitting the members into their own SMSFs may be the best approach.

“In the Wooster and Morris case, Mr Morris ignored the binding death nomination and ripped the money out for herself,” Mr Hay-Bartlem told the SMSF Association technical day last week.

While Mr Morris’ daughters managed to have the binding nomination upheld in court in order to get the money back, Mrs Morris died before the final judgment was handed down and had spent most of the money already.

The situation would not have happened if there had been two separate super funds, Mr Hay-Bartlem said.

“I had a client couple in a second marriage and they just wanted to make some tweaks to their existing wills and they were a bit hazy in the meeting about the details of it. I found out later that actually neither of them knew what was in the other’s will, but they were in the same SMSF together,” he said.

Mr Hay-Bartlem said in these types of scenarios, having two separate funds is usually the better option.

 

Separate SMSFs underutilised in estate planning
smsfadviser logo
promoted stories

SUBSCRIBE TO THE SMSF ADVISER BULLETIN

News

Strategy