3 Common Estate Planning Problems
That could cause bigtime loss for your loved ones if not dealt with now!
Most households in Australia have dad doing all of the financial organising and Mum just signs on the dotted line when requested to do so. This is thwart with danger. Each SMSF Trustee, or Director of the company that runs the SMSF, has a duty to be hands on in the running of the affairs of the SMSF. It is not sufficient to run an SMSF, or a company for that matter, and to say I was relying on the other Trustees or Directors to do the right thing. The law doesn’t like that and neither does your family when they miss out.
The Loppollo Case from the WA Supreme Court (& confirmed in their Court of Appeal) is a classic example. Mum & Dad were in the SMSF and Mum had expressed in her private Will that she wanted her SMSF balances upon her death to be paid to her kids. There were no documents binding the SMSF Trustees to make such a payment upon Mum’s death i.e. there were no binding death benefit nominations in the SMSF. Mum died. Dad brought in a company to run the SMSF as Trustee with him acting as single Director… and as permitted by the terms of the SMSF Deed he paid Mum’s death benefits to himself. (Because he then had control of the fund and was legally permitted by the documents and laws to do so. There were no documents binding the SMSF Trustee. The SMSF Trustee had the discretion where to pay the money! Dad had control of the sole Corporate Trustee) . . .And the kids missed out!
Your Will does not bind your SMSF! I think I need to say that again, your Will does not bond your SMSF! Nor does it bind your Family Trust if it doesn’t comply with that trust’s terms, your family company Directors, or the running of your estate if you lose your faculties but do not die. There are other documents that protect each of these situations.
Peace of mind is obtained when you act now! Fix things now whilst you are able to do so. Every cent you invest in doing so now saves much greater expense and emotional trauma after you die. As the age old adage says, “Fail to plan and you plan to fail!” Hence you need to act now so mum is protected if anything happens to Dad. Your family and your facts are unique, and you deserve to have peace of mind by having in place proper structures now.
Contact Luke today on 8536 4444 to discuss your needs.