POWERED BY MOMENTUM MEDIA
Family trusts an alternative to super?
Clients looking for wealth management alternatives to superannuation in light of the 2016 Federal Budget changes to the system may suddenly find family trusts more attractive as it has fewer restrictions and rules than self-managed superannuation funds (SMSFs).
Such was the view of chartered accountant and financial advice firm, HLB Mann Judd, which argued further tinkering and regulation of the super system would only increase uncertainty.
The firm's wealth management partner, Michael Hutton, said that people have overlooked family trusts as a way of managing wealth as the popularity of SMSFs have risen.
"Yet family trusts have a number of advantages over SMSFs — and these advantages have increased with the budget changes — meaning they are a vehicle that may now make even more sense to manage family wealth," Hutton said.
Advantages included asset protection options, intergenerational wealth transfer, no limit on contributions to the trust and the option to increase capital, no age limits to access funds, income splitting to all family members, which may aid those who are low income earners, and estate planning flexibility.
He was concerned about several changes to the super system in the Budget, including the $500,000 lifetime limit on non-concessional super contributions compared to the current amount of $180,000, and the reduction of the concessional contribution limit for those aged over 49 from $35,000 to $25,000.
He also raised several questions about the $1.6 million pension account limit per person.
"Presumably this equates to $3.2 million for a couple. But what about the situation where one member has $4 million in super but the stay at home partner has $200,000. Is this disadvantaging that couple? Will there be any opportunity to equalise the accounts?"
Recommended for you
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
ASIC has sentenced former director Mudasir Mohammed Naseeruddin over four years imprisonment for ‘egregious conduct’ and dishonestly obtaining client funds from six investors’ SMSF accounts.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI First Close USD
66.99 3 y p.a(%)
2
Hills International
63.66 3 y p.a(%)
3
Acadian Global Equity Long Short Class A
36.33 3 y p.a(%)
4
CFS FC Acadian Global Equity Long Short
35.96 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
32.23 3 y p.a(%)
Add new comment