SMSF Review – No Estate Plan?

estate planning is essentialMost clients I see for a SMSF review have not done much about Estate Planning.

Estate planning means making a plan for the distribution of everything you own and control when you die.

While most people I meet have been meaning to get around to it, they haven’t taken action.  I understand why because it is a complex area, and sometimes it is hard to know where to start.

Estate planning is more than just having a Will.  Your last will & testament only deals with money and assets that are owned in your personal name.  Whether you realize it or not, you probably have other assets within your control that can’t be dealt with directly by your Will.  There are separate strategies for these.  They include:

  • Money & investments held in superannuation, including your SMSF
  • Life insurance policies
  • Jointly owned property (e.g. your home)
  • Money and property controlled in a private company or trust

Whilst you can’t put your home in your SMSF, it is common to draw some of the other common elements of your wealth together into your SMSF such as money, investments, property, life insurance policies and business premises.

And there is a reason for this!

One of the lesser known advantages of a SMSF is the protection it offers as a vehicle which can carry and distribute family money and assets from one generation to the next.

I can’t emphasise enough how important estate planning is as part of a SMSF review.

This protection is not only effective against those you love the least, like creditors and those who want to sue you, it is also effective against potential risks arising from family members you love the most.

I know that sounds really strange, nut here’s an example.

The last thing you want is for hard earned money to be squandered by a child with a drug or gambling habit, or be taken by a child’s departing spouse as part of a divorce settlement.  That can happen if you don’t get it right.  And I can tell you now that a simple Will won’t cut it.

Also if you have a child who can’t fend for themselves, for example a child with a disability or a spendthrift child, you can set up the means to provide for that child for life, long after you’ve departed this world.

However, it is essential that all of these arrangements be put into place while you are alive and still have your full mental faculties to make such decisions.

This is the heart of estate planning!

Call me for a SMSF review and get your SMSF working for you as the inter-generational wealth vehicle it should be.


General Advice warning

The article above is general advice only designed to educate and heighten awareness of self-managed superannuation and estate planning issues. It should not be regarded as personal advice, because it does not take into account your personal circumstances, financial situation or specific goals. For personal advice that is tailored to your needs, please contact me or consult your licensed financial adviser.