Self-managed superannuation fund (SMSF) holders should plan their legacy as carefully as they do their investments, as a will may not be sufficient to ensure their money goes to the people its intended for.

Have you made a Binding Death Benefit Nomination?

Have you made a Binding Death Benefit Nomination?

According to TAG Partners director Michelle Griffiths a binding beneficiary form where SMSF holders specify exactly who will replace them as trustees of the fund once they die may be enough.

“With a binding beneficiary form, you only do one nomination, which lasts until you want to change it, so it is a fairly easy process,” Griffiths said.

“It is not difficult for people to contest a will if they feel they haven’t received enough, but it becomes very difficult to do the same with a binding beneficiary form.”

Griffiths uses the example of a couple holding an SMSF where one of them dies.

“The decision on who to appoint as the second trustee needs careful consideration if they have more than one child,” she said.

“If only one children is appointed, there is the risk that the other, who might have been doing things fairly before, doesn’t behave the same way. You can’t predict what will happen because personalities often change when there is this amount of money involved.”

How to plan an SMSF legacy has become a bigger issue as members age and become aware of the possible scenarios if they die.

“Thanks to tax concessions, people have now quite a lot of wealth in superannuation, more than they had a few years ago, so the ability to control where that goes is critical,”  Griffiths said.

Via: http://www.financialstandard.com.au

By: Laura Millan

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