Planning your estate

SMSF technical expert and columnist for The Australian newspaper
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Estate planning involves the administration and management of a person’s property before or after death. It typically covers death as well as severe mental or physical disability and even bankruptcy. Superannuation, and self-managed super funds in particular, are handy estate planning vehicles.

How do death benefits work?

Many people misunderstand how death benefits are treated in superannuation. In an ideal world, the process of paying a death benefit from a super fund is done in the following order:

  1. The trustees examine their trust deed to see who is eligible to receive the death benefit.
  2. The trustees make sure their intended beneficiaries can receive a death benefit under the super laws.
  3. The trustees work through the tax aspects of a death benefit.

In reality, however, it is often a bit of a chicken and egg issue. In most cases you move between the trust deed, super laws and tax aspects until you end up with the best solution that satisfies all three aspects.

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