Willing to a Super fund

Discussion in 'Wills & Estate Planning' started by Millie, 13th Nov, 2020.

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  1. Millie

    Millie Well-Known Member

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    Is it possible to specify in a will, I leave $x to Person A’s super fund?

    If it’s possible, it ticks a few boxes I think.
     
  2. Trainee

    Trainee Well-Known Member

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    What advantages do you see in doing this, even assuming you could?
     
  3. Millie

    Millie Well-Known Member

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    Well let’s assume I die young, I could still leave assets to children outright, but I could also leave funds into super. In that way, the funds in super are protected from them spending, protected from potential divorce, protected from potential bankruptcy. Also would get years of compounding.
    Just a thought.
     
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  4. Trainee

    Trainee Well-Known Member

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    As opposed to a testamentary trust? Additional advantage of income to children taxed at adult rates.
     
  5. Millie

    Millie Well-Known Member

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    Ok, well let’s say I die not young, but earlier than average, and offspring are young adults. Could do so in addition to a testamentary trust.

    Super means at least their retirement is possibly comfortable regardless of their decisions throughout their younger days.

    Could even contribute to their super while still alive. Say as part of a Trust distribution.

    Like I say, just a thought.
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Its possible, but you probably shouldn't.
     
  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A will can leave a testamentary entitlement to a beneficiary. A fund isnt a beneficiary. A person may not even be a member. The will could be defective
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The superfund is a trust so a will could leave something to the trustee of the trust, but it would trigger CGT event K3 and might result in NALI too
     
  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Read TR 2010/1 also. The will could trigger excess contribution taxes and other outcomes that arent desired. A fund may be obliged to return contributions in some cases too eg no TFN was quoted. Member work test and more.
     
  10. Trainee

    Trainee Well-Known Member

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    Still don't see how this is better than just creating a testamentary trust. If the concern is the beneficiaries spending the trustee can be appointed and instructed accordingly.

    Super would have all the age limitations, and lose out on the tax advantages of a tt.
     
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It's not better
     
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  12. Trainee

    Trainee Well-Known Member

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    The problem with this type of inquiry is the way the question is asked.
    'Is it possible to do x' ignores the fact that there might be a better way than x in the first place.
     
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  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Just because you can doesn't mean you should!
     
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  14. Millie

    Millie Well-Known Member

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    Absolutely correct.

    But as my science teacher said back in the 20th century - “There’s no harm in asking the question. Only way to learn.”

    Thanks for the replies.
     
    Terry_w likes this.

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