I have both an SMSF and an industry superfund, both in the pension phase. As part of my estate planning, I'm considering whether to liquidate the SMSF now or leave it for my children to manage later. Has anyone gone through this process? What are the available options? The income from my industry superfund will still provide a comfortable living for the rest of my life.
Estate Planning Options Regarding SMSF
Shark4fins on 18/06/2024 - 16:47
Comments
So OP could withdraw it tax-free and then invest it wherever they want, ready for their children to inherit one day?
Providing conditions are met. It’s worth exploring and getting the advice for sure
You've worked hard for it, spend it on yourself.
I agree. I love watching my parents
spend my inheritancehaving fun in their retirement. Both worked hard and their time here is coming to a close. Spend up big I reckon.
Nothing can make parents happier, than buying kids Bugatti GT :)
The economy will thank them for it too.
Not so good for those who have a home loan.
can you adopt me
Son?
My random thoughts…
I guess it depends how much it costs to maintain it each year and what type of assets are in the SMSF.
The management fee of the SMSF to some degree is likely fixed and is not dependent on the asset size, whereas I am guessing the industry fund management fee is based on asset size.
When you die, assuming the kids are not financial dependants, the pension in the SMSF would likely be paid out as a lump sum anyway. (assuming there is no dependant who could instead get a reversionary pension). If there is no assets left in it the SMSF after this its probably going to get wound up anyway.
Are your kids the kind of people would would be interested in managing the SMSF in the future for their own purposes.
I’d roll it over in to your industry fund. They may need to create a second account, or roll both back to accumulation and then back to pension phase as one, but they’ll be able to help you with that.
Biggest advantage for SMSF disappears in retirement phase. Keep the admin simple and let someone else do it.
Consider the costs before doing this. I run an SMSF myself for less than 1K, looked at rolling to an industry fund but would pay a percentage there which is way more expensive. Whilst the declared fees can look low, the investments have percentage fee built in usually. With the right software SMSF admin is quite simple.
You can't leave super to someone in a will you can Nominate a Beneficiary or leave it to the trustee to decide.
You can leave it to your estate, specify in the will who will get the estate.
leave it for my children to manage later
No such thing. It doesn't live on if you are the only beneficiary and you pass away.
Well generally speaking. if you’ve met a condition of release and over 60 then it’s tax free to you. If you die and leave it to a financial dependant then it’s tax free to them. However if you die and leave it to a non financial dependant they will get taxed…