Estate Planning

Calls to action can limit liability

liability estate planning

Issuing simple estate planning call-to-action statements to SMSF clients can effectively allow advisers to abrogate any liability they may face.

Advisers can effectively mitigate their liability with regard to an SMSF client’s estate planning strategy through the provision of simple call-to-action statements, a superannuation lawyer has said.

“When you’re talking to a client about their super estate planning, you [should] make simple statements [that are] very clear and are call-to-action statements. They [should be] statements along the lines of: ‘They’re your beneficiaries, not mine. You need to sort out your super estate planning because if you don’t sort out your super estate planning, your beneficiaries may not get what you might want them to get,’” Coleman Greig principal lawyer Peter Bobbin said at the recent Chartered Accountants Australia and New Zealand SMSF Conference 2021.

“[In doing so] you’ve made clear that it’s their responsibility, not yours. You see how this works? You’ve just done a fantastic call to action and you’ve disclaimed liability. That to me is just acting as a professional and it’s a good thing.”

Advisers can achieve this objective very easily by issuing an estate planning flyer to their client base, Bobbin pointed out.

According to Bobbin, taking steps to avoid providing any individual an avenue of recourse through the courts is critical because practitioners can be held to account for a long period of time and are faced with a very large number of variables with which to contend.

“We professionals can carry a super liability for a very, very long time,” he said.

“[We’re not] like doctors who can bury their mistakes. We might be burying our clients, but the value or liability of the estate may be traced [back to us] through another person.

“For the vast majority of our clients, indeed for the vast majority of Australians, it won’t be a problem because [most] people have a straight moral compass. The [issue] is we just don’t know who the problem is going to be.

“That’s why we have to be on the lookout.”

During the same presentation, he suggested advisers need to ensure an SMSF is governed by the appropriate legal jurisdiction to limit estate planning risks.

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