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LEGAL
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with NICHOLAS LAWTON FROM PRIEST LEGAL
E S TAT E P L A N N I N G & S U P E R A N N U AT I O N
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any of us spend a great deal of time planning for our retirement but do not put the same effort into planning for our deaths. Estate planning is not always a pleasant topic to think about, nor is it a commonly understood process. It is however a way of caring for your loved ones even after you pass, and one that will ensure your assets go where you want them to. Good planning can help your executors minimise trouble when administering your estate – and may even reduce taxes and costs. For most people, estate planning involves simply creating a will. While this is an important first step, sometimes it is not enough. Increasingly, superannuation is a major asset for many people, before and after retirement. In many cases people die with a substantial superannuation balance, and we find that it is often overlooked in the estate planning process. Why? Simply put (and at the risk of being unpopular) your superannuation is not “your” money. The reason for this is that your super fund is a trust set up to fund your retirement. Legally, you do not actually
control the assets held in that trust; they The main way to retain control of what are controlled by a trustee and administered happens to your super after your death is to for your benefit. Unlike your home and car make a Binding Death Benefit Nomination and the money in your savings account, the (BDN). This important document sets investments held in your superannuation out instructions to the trustee of your fund do not form part of your estate super fund saying how you want your when you pass. That remaining super to be means that in most distributed on your circumstances your death. Provided the Good planning can superannuation nomination is valid help your executors will not pass in – and there are strict minimise trouble when accordance with rules about validity administering your your will, unless you including setting out estate – and may even have made specific precisely how it should reduce taxes and costs. arrangements for that be written, signed and For most people, estate to happen. dated – the trustee planning involves simply In the absence of must follow the creating a will. While this suitable planning, instructions. is an important first step, the trustee of a super A BDN therefore sometimes it is not fund has discretion as allows you to direct to which beneficiaries where your super goes enough. may inherit your on your death. It can super and will decide be just as important as on a distribution between your dependants. your will in determining what happens to It is not uncommon for disputes to arise your assets when you die. It is an essential about who should benefit. For example, part of any estate plan. in split or blended families there may be If you would like to know more about competing interests between a spouse and what happens to your superannuation children from a previous relationship. It is up when you die, or have any other estate to the trustee of your super fund to make a planning questions, the friendly team at decision in such disputes. Priest Legal are here to help. GREATER PORT MACQUARIE
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