SMSF Estate Planning Case Studies

/SMSF Estate Planning Case Studies
SMSF Estate Planning Case Studies2018-09-14T15:22:28+00:00

The following case studies highlight what can happen if you do not establish a comprehensive Estate Plan.

Katz v Grossman

[2005] NSWSC 934

In Katz’s case, a member of the fund died with two children – a daughter who was a trustee of the family SMSF and a non-member son. The father left $1Mil in SMSF benefits with a direction in his Will that all his superannuation assets were to be split between his two children equally. On his death, the remaining trustee – his daughter (as trustee) did not take into account his non-binding death benefit nomination and paid all of the deceased member’s benefits to herself. The NSW Supreme Court held that she was entitled to take this action under the fund’s trust deed and the Will was ineffective. As a result of not making sure the SMSF was structured correctly, the deceased’s daughter received his entire SMSF portfolio and his son received nothing.

Donovan v Donovan [2009] QSC 26

In a recent case where the Supreme Court of Queensland considered whether a letter written by a member of a self managed superannuation fund (SMSF) to the corporate trustee of the fund constituted a valid binding death benefit nomination. The court held that it did not as it failed to meet the requirements of reg. 6.17A of the Superannuation Industry (Supervision) Regulations 1994 (Cth). As a result of not making sure the SMSF Death Benefit Nominations were set up correctly, the deceased’s spouse received his entire SMSF portfolio instead of it being split 50% to his spouse and 50% to his daughter as per his will.

Ioppolo & Hesford v Conti 2013 WASC 389

In this case, Mr and Mrs Conti were married but estranged and they had an SMSF in which they were the sole member trustees. Mrs Conti made a will in January 2005 and appointed two of her four children executors.  She expressed the desire that all of her entitlements held in the SMSF be paid to her children. She specifically stated that she did not want any of her superannuation entitlements to be paid to her husband.

Read the complete story here and why the ruling heard in favour of Mr Conti and not Mrs Conti’s children (the beneficiaries) because her SMSF estate plan wasn’t kept up-to-date.

All of these situations could have been avoided by obtaining professional estate planning advice.

Please contact Adam Passwell or Andrew Clegg for further information regarding estate planning.

Related Links: SMSF estate planning FAQs

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