SMSF legal firm Abbott & Mourly Lawyers, in conjunction with specialist document provider LightYear Docs, has launched a binding death benefit nomination (BDBN) with an integrated SMSF testamentary trust to support advisers and trustees in their estate planning strategies.
“Providing the opportunity of an SMSF BDBN with an in-built testamentary trust is important legal and advising work,” Abbott & Mourly non-legal senior consultant Grant Abbott wrote in the latest edition of the selfmanagedsuper e-magazine.
“It’s crucial to engage experienced individuals to ensure an SMSF estate planning strategy is sound, protective, compliant and, most importantly, aligns with the client’s intentions, because when it comes to protecting your clients’ and their family’s wealth, it pays to be at the top of your SMSF advising game and not playing in the thirds.”
The new offering aims to give testators and their dependants flexibility in using and distributing super assets after the trustee’s death, while protecting beneficiaries’ superannuation assets from exposure to legal action.
“One of the primary benefits of an SMSF testamentary trust is the protective barrier it forms around the assets from family law and creditor claims,” Abbott stated.
“The structure ensures the assets within the trust are not held directly by the beneficiaries, thereby shielding them from potential legal disputes or insolvency proceedings.
“An SMSF testamentary trust also offers a safeguard against family provisions claims on the estate. By circumventing the estate and directing super benefits into a testamentary trust, the exposure to litigation is minimised, ensuring these assets reach the intended beneficiaries.”
The testamentary trust is designed to meet the requirements of section 102AG (2) of the Income Tax Assessment Act 1936 and allows minors who are beneficiaries to be treated as adults for tax purposes when they receive any distributions from the trust after the death of the SMSF member.
The trust will be available to advisers and practitioners from the LightYear Docs website after the official launch of the service on 7 August.