What are superannuation proceeds trusts?

Recently, an adviser contacted me in relation to an estate planning exercise they were assisting with.

The lawyer advising the client recommended against establishing testamentary trusts until both the husband and wife had passed away.

The financial adviser was therefore exploring whether it would be possible to establish a 'superannuation proceeds trust' to effectively 'sidestep' the lawyer's recommendations.

For those not familiar with the superannuation proceeds trust structure, it is very similar to an estate proceeds trust (which was profiled in the post from 19 May 2010: http://blog.viewlegal.com.au/2010/05/testamentary-trusts-is-it-ever-too-late.html).

A summary of estate proceeds trusts is available on the View Legal website (www.viewlegal.com.au) via the core services section.

Until next week.

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Testamentary trusts - is it ever too late?

As you may recall from previous posts, there are significant advantages of utilising a testamentary discretionary trust (TDT) as part of an estate planning strategy.

We often receive queries from clients asking whether it is possible to establish a TDT to receive estate assets after a person's death.

While establishing a TDT in a person's will is by far the simplest approach, it is possible for an estate proceeds trust (or post-death TDT) to be established following a person's death to receive the estate assets.

Any property received from the estate may be transferred to an estate proceeds trust (EPT) within three years for the date of death, provided the trust is structured to satisfy the requirements in the tax legislation. 

The summary about EPT on the View Legal website is available via the View Legal website (www.viewlegal.com.au) via the core services section and explains the requirements in further detail.

Practically, the area where we see the biggest demand for estate proceeds trusts is in relation to receiving insurance proceeds from life insurance policies.

Matthew Burgess