POWERED BY MOMENTUM MEDIA
Estate planning implications from Budget super changes
Anyone with funds in superannuation, particularly self-managed superannuation funds (SMSFs), should be reviewing their estate planning now to ensure their estate plan is not adversely impacted by last year’s Budget changes, according to law firm, Cooper Grace Ward.
The firm’s tax partner, Scott Hay-Bartlem said that while much had been written about transfer balance caps and accounts, reducing pension balances, and capital gains tax relief, responding to the changes also had some fundamental estate planning consequences.
“In working through the changes and their impact with clients, it is apparent that most estate plans now need some adjustment as we deal with the new measures, particularly where there is a self-managed superannuation funds,” he said.
“For example, simply taking funds out of a reversionary pension back to accumulation phase to comply with the new transfer balance cap alters what happens when that member dies,” Hay-Bartlem said. “While the remaining pension may continue with the same reversionary beneficiary (depending on the commutation process and documents used), the reversion will not apply to the amount in the accumulation account.”
He said this might mean further documents were required (such as a binding death benefit nomination or to pass control of the SMSF appropriately).
Hay-Bartlem said anyone with funds in superannuation, particularly SMSFs, should be reviewing their estate planning now to ensure their estate plan:
- Is not adversely impacted by the new rules or the steps they take to comply with the new rules; and
- Still achieves their estate planning goals after 1 July.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
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.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
99.46 3 y p.a(%)
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
