Gilham

Estate planning provides you with peace of mind that your affairs will be in order if you become incapacitated or die unexpectedly.
The components of an estate plan will vary according to your personal circumstances. But every estate plan has the same aim: to ensure your wealth is managed and transferred according to your wishes in the most financially efficient and tax efficient way.

Estate planning encompasses:

• Will preparation
• Appointing an Executor of the Will.
• Determining whether a Power of Attorney is required, and who should be appointed in that role.
• Establishing a discretionary trust(s)

Consideration of an Estate Plan depends upon:

• If you have sizeable assets and the personal circumstances of your beneficiaries require the creation of more complex trusts within your Will
• You have vulnerable beneficiaries with special needs
• Your investment or business structures are complex and may include a family discretionary trust, a self managed superannuation fund or a private company
• You wish to minimise the tax liability of your estate or your beneficiaries, for example via superannuation or testamentary trusts
• Insurance policies you have in place including the ownership structure of those policies

No matter how simple or complex your family or financial affairs, we can assist to help you plan your estate. Our planners work with an estate planning specialist to devise the best strategy for you and your estate, and to help you ensure your wishes are met when you’re no longer around.

Superannuation Death Benefits:

Your superannuation is likely to be one of your most valuable retirement assets. However, you may not realise that it does not automatically become part of your estate on your death.

What is a death benefit nomination?

A superannuation fund may permit a member to give a notice to the trustee of the superannuation fund requesting the member’s benefit to be paid at their death to either the member’s estate or their dependants specified in the notice. The notice may be either a binding nomination or a non-binding nomination.

A binding nomination is an instruction to the trustee by the member and the trustee must comply with it. A non-binding nomination, on the other hand, is merely an expression of the member’s wishes, and the trustee can exercise its discretion not to follow the nomination. As a result, only by making a binding nomination can you ensure that your intentions regarding your superannuation will be carried out. In the absence of a binding nomination, it is the trustee of a superannuation fund who decides how and to whom superannuation benefits are paid following a member’s death.

What is required to make the nomination ‘binding’?

In a public superannuation fund, a member’s death benefit nomination is binding if each of the following conditions is met:

• The governing rules of the superannuation fund permit binding death benefit nominations
• Each death benefit nominee is a legal personal representative of the member’s estate or a dependant of the member
• The allocation of the death benefit between the nominees is clear
• The notice is in writing, and is signed and dated by the member in the presence of two witnesses aged over 18, neither of whom is a nominee
• The notice contains a declaration, signed and dated by the witnesses, stating that it was signed by the member in their presence
• No more than three years have passed since the notice was first signed, last confirmed or amended by the member.

A nomination made in this manner will also bind a trustee of a self-managed superannuation fund. However, these funds usually have the advantage that the governing rules of the fund may allow a member to bind the trustee to pay a death benefit in accordance with the fund’s rules without the requirements to renew the nomination every three years and have the nomination witnessed.

What are the advantages of a binding nomination?

A binding nomination gives you certainty that your superannuation benefit will be transferred in accordance with your wishes. If you have planned your estate to achieve particular outcomes, a binding nomination can ensure your superannuation benefits flow into your estate and allow the estate planning strategy to be carried out. Alternatively, a binding death benefit nomination can be used to direct superannuation benefits away from your estate, reducing the likelihood of claims against your estate by disgruntled beneficiaries or creditors.

When should a binding nomination be reviewed?

Your binding death benefit nomination, like your Will, should be kept up to date so that it reflects your current estate planning strategy and takes into account changes to your circumstances and those of your intended beneficiaries. However, unlike your Will, a binding nomination provided to the trustee of a public superannuation fund will generally lapse if it is not confirmed or amended within three years, leaving the distribution of your superannuation benefits to the discretion of the trustee of your superannuation fund.

Click here to read a case study