Anything and Everything about Superannuation

I didn't know that. Really off in my view. And I agree with you about possible challenges to your wishes as expressed in your will. I know it can be done but, yes, it sucks.

My children were very, very fortunate no one challenged a deceased relative's will. They were named as beneficiaries and got the dosh - a reasonably substantial amount too - but other blood relatives were left out. I read the will and my eyes rolled heavenward. I don't think my children even realise how darn lucky they were.

 

Shhhhh. Keep quiet.

 

What if your executor ends up being the public trustee?

 

The only person that could make a family provision claim is an 'eligible person'. Under NSW law this would be very limited
Legal Tip 50: Family Provision Claims Against Estates

Other family members could potentially attack the validity of your will, which might be hard if prepared by a lawyer. If the will is invalid then the intestacy laws could apply and certain relatives could receive some of your super that way

 

Possible if all other alternative executors fall over as well. But again, I'll be beyond caring. I once had this type of discussion with a partner of a legal firm. Had a great sense of humour and he expressed the view of let's not take this too far otherwise we'd nominate everyone in Canberra just in case there is some cataclysmic event and there may be a few survivors left.

 

The public trustee couldn't do much anyway, with a superfund. They would have to pay your benefits to a dependant, but could potentially favour one child over another, if the BDBN is defective.

A bigger concern would then taking over the appointor position of a discretionary trust.

 

If I recall correctly @RogTheBear is or was a member of a hybrid defined benefit fund.

Them is gold, gold, gold.

 

Ahhh but only if its 100% valid. If its not valid the fund trustee may determine how benefits are paid. eg Dad leaves XX% to wife who is no longer a spouse. And then they could do as they wish. Binding may also expire after 3 years. Binding isnt always "binding"

 

I've been informed, but please correct me if I have misunderstood, that for a SMSF the BDBN can be indefinite.

And when I have had some discussions on it, it can be better not to make the death benefit payable to your Estate, especially if you have knowledge there could be a challenge to your Will.

As always with money wherever it is, it isn't as simple as it first appears when sharks are looking for a feed.

 

Thats correct. the 4 year rule doesn't apply to SMSF BDBN.

If the super forms part of the estate and the will is challenged then it is will be going to different persons if the challenge succeeds.
But in NSW it could still be attacked if it doesn't go to the estate.
Something to take legal advice on.

 

Now you have mentioned it wasn't there a recent case where a young lass died and had made her estate or super payable to her mum but her fiancee challenged it and won?

 

That is the case with the former judge.

I am not sure of the details but I think she might have nominated her mum which made the BDBN invalid. The trustee of the fund decided to pay it to the spouse. I think it was on A Current Affair.

 

Yes the case of the much older magistrate. There was also some dispute over whether he was spouse. The trustee seemed to reach a view that has been disagreed by some. Death benefits incl super
He was a magistarte and she worked for him as a court clerk and it was a 7 month relationship with them living together for just 4 months. And soon after her death he reunited and moved in with his fomer partner of 18 years despite being tragically troubled by her death and the case he fought. The fact they were engaged and that she resided with him and they lived a defacto relationship and due to his far higher salary she was also his dependant which met the SISA definitions. SISA doesnt prescribe the duration of the spousal relationship.

 

Thanks for that @Paul@PAS.

I won't say what I would like to say but tacky would be one of the words I'd be using - along with a few others.

 

This is slightly related
Legal Tip 351: Defacto Relationships, Death and Intestacy Legal Tip 351: Defacto Relationships, Death and Intestacy

 

The Age reports....

In October 2019, shadow attorney-general Ed O’Donohue made a rare complaint to the Judicial Commission about Mr Higgins. Mr O’Donohue alleged the magistrate lacked judicial independence due to his relationship with Ms Petrie and raised concerns about an incident involving his alcohol consumption at Crown casino. The commission dismissed these two allegations due to lack of information in April last year.

Mr O’Donohue’s third allegation – that Mr Higgins’ appointment by the Andrews government in 2017 was politicised because it followed stints as a Labor candidate for the state electorate of Shepparton in 2014 and the federal seat of Murray in 2013 – was found by the commission to be outside its jurisdictional scope.

 

Eyebrows raised emoji.

 

A couple of days ago I started investigating this (for estate/tax planning purposes) - some ramblings from me here. In particular looking at withdrawing super at age 60 and then recontributing via ncc / downsizer. I was coming to the conclusion that I would not be able to get enough of the lump sum withdrawal back into super due NCC annual limits, age and worktest constraints

I'd seen the following proposal from the 2021 budget, before but had completely forgotton about it - this would pretty much solve the NCC limits

Flexible super - Repealing the work test for voluntary superannuation contributions

Flexible super – repealing the work test for voluntary superannuation contributions
On 11 May 2021, as part of the 2021–22 federal Budget, the Australian Government announced it will change the superannuation contribution rules for individuals between 67 to 74 years old.

From 1 July 2022, individuals who are between 67 to 74 years old will be able to make or receive personal contributions and salary sacrificed contributions without meeting the work test, subject to the existing contribution caps. They will still be required to meet the work test to claim a deduction for personal contributions.

This measure is not yet law.​

Still don't quite have my head around
i) if/how I can avoid CGT when taking the lump sump out at 60.
ii) if/how I can segregate my largely taxable component balance from futher tax free component balances I would contribute between now and 60 so that when I withdraw a lump sum it will be the former and not the later. I've heard that it's possible to do this by using a seperate super account to contribute all tax free contributions - but is it a good idea?
iii) does it all stack up from the perspective what the outcome could look like at various points along the timeline if I did this vs if I didn't.
Some more to ponder.

 

Binding Death Benefit Nominations — Negotiating the uncertainty

What a mess.

 

Grant abbot has an interesting take on the intersection between estate planning and SMSFs.

LightYear Docs launches specialist SMSF will