Super Fund Deed Amendments Needed For Many Funds

Many Super Fund Deeds do not allow the surviving trustee in event of death of a member / trustee to use their discretion to retain death benefit lump sums within the super environment on behalf of the beneficiary.

The Problem:

Many Super Fund Deeds do not allow the surviving trustee in event of death of a member / trustee to use their discretion to retain death benefit lump sums within the super environment on behalf of the beneficiary.

The Consequences:

Many beneficiaries of super death benefits such as spouses may be better off with retianing their funds in Super rather than having them paid out to them personally as a lump sum on death of their spouse. This is for many reasons, for instance:

1. Prevent having to divest assets to cash and incur transaction, advisory and accountancy costs associated with divestment of what may be many of the Super Funds assets.

2. Funds paid out to personal name of beneficiary may not be able to be contributed back into Super environment due to contribution threshold, work test restrictions or age based contribution limits.

3. Funds held in own name may result in detrimental very Tax and Age Pension impacts.

The News:

Get your Super Trust Deed reviewed to make sure it provides the surviving trustee with the discretion to retain death benefit ETP payments within the Super Fund as a reversionary pension for the beneficiary.

A reversionary pension may or may not be the best thing for that beneficiary - but as long as the trustee has discretion - then there is the option - to simply obain advice at the time that considers that circumstances and extant tax laws and take the best option = reversionary pension or lump sum ETP.

 

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