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Super Changes Require Estate Planning Reviews

28/02/2018

It is clear that the 1 July 2017 so-called ‘fair and sustainable’ changes to the superannuation laws affect the estate plan of every working Australian - whether they have actually formulated such a plan or not.

Indeed, the effect of these laws on estate planning was a feature of the recent SMSF Association National Conference. 

Speaker after speaker spoke of how the recent changes would impact clients’ estate planning and the need to ensure that old strategies and structures were reviewed to ensure compliance and future efficacy.

No less a person than the SMSF Association’s Head of Technical, Peter Hogan, wrote recently on the issue in selfmanagedsuper magazine.

Many advisers have spent their time trying to simply understand the new laws and how they will affect the administration of their clients’ superannuation. Now attention must be directed to the next phase – how the laws will require changes to the clients’ estate planning, particularly in regard to the arrangements for passing their death benefits to their family.

The task is not just in relation to people who don’t have an estate plan. There may be a need for advisers to review the arrangements their clients already have in place and to assess how they stand up as a result of these changes. Many estate plans and estate planning strategies may need adjustment.

Do clients appreciate that in some cases it may no longer be a good idea for their super death benefit pension to automatically revert to their spouse on their death, while in others it might be better for their pension to be reversionary than to permit any flexibility by using a death benefit nomination instead?

The best interests of the client are clear – they must have good estate planning and they must review that estate planning in light of the new laws.

Please contact us if you require help with clients’ estate planning. Note that it is not necessary for an adviser to be an expert in estate planning for them to make estate planning part of their offering to clients. We are able to fill the gap in that regard. We also offer resources to assist advisers explain to clients the importance of finalising their estate plans.