Tuesday, February 4, 2014

Costs paid via superannuation

Last week's post looked at the debate surrounding the incurring of estate planning costs by superannuation funds.

While the conservative approach seems to be that all estate planning costs should be incurred by members personally, practically, there are a number of examples where having a superannuation fund incur the relevant expense would appear reasonably arguable, including:
  1. where a superannuation trust deed is being updated as part of an estate planning exercise, clearly these costs should be incurred by the fund; 
  2. where, as part of the update, binding nominations are prepared (either on a standalone basis or 'hardwired' into the trust deed), then again these costs are legitimately payable by the fund; 
  3. where superannuation makes up a significant component of a member's overall wealth and the member intends (either via binding or non-binding nominations) for their superannuation entitlements to pass via their will, then the costs of the will (including any testamentary trusts incorporated into the documentation) should also be able to be paid by the fund; 
  4. strategic advice to members in relation to the impact of death on their superannuation entitlements should also be properly payable by the fund; and 
  5. while the nexus might be slightly less obvious, ensuring that a member has a legal personal representative able to take over the trusteeship of a self managed super fund may also justify a fund incurring costs for implementing a member's enduring power of attorney. 
As with many similar topics, the general position outlined above will depend on the particular factual situation and the approach adopted by the advisers and firms directly assisting superannuation fund members in these areas.

Until next week.

Image credit: Katy Silberger via Flickr