Come the close of the financial year and SMSF trustees begin looking for plans and strategy to maximise their superannuation benefits. Many techniques can be employed to optimise returns by June 30. I know after-tax contributions come to the mind first but they are not the only one in the wings.
Australians oscillate between dreams of a comfortable retirement and the biting reality of a modest one. Unfortunately, for many their Super fund might not even be enough to hand them over a modest retirement.
The economic meltdown of 2008 challenged various norms, no less the financial ones. Traditional fortresses of investments capsized and people started hunting for new means to secure their money and future better. Unitised superannuation funds got the stick and in its place the SMSF investments surged ahead in public perception. The fact that 40% of super funds are held in ‘Self-managed’ today tells its own story.
Just as there are many who would vouch for the way SMSFs have added value to their lives (and portfolios), there are definitely a few who feel that SMSF investment “was a wrong decision and that it did not suit my interests at all”. So where do investors belonging to the latter fraternity go?
The ATO is being vested with a substantial amount of powers where it comes to dealing with non-compliance on the part of super fund owners. A piece on the website of Australian Taxation Office sheds light on them.
Estate owners often assume death to be a third-party occurrence. Unfortunately then, when they cross the last bridge, they still have a poorly drafted will, no clear direction of passage of benefits and a beeline of relatives fighting for the pie.
How often do you think about how your SMSF investments should be passed on? Have you given this dimension of estate planning a serious thought?
Ask Meg Heffron, customer head at Heffron, and she will tell you how corporate trustees are the way ahead. While it is true that 9 out of 10 SMSFs have individual trustees on board, it is truer that the figures will change dramatically towards corporate trustees in a short while. ATO’s powers to impose penalties have been revised further and this only augurs well for the lobbyists of corporate trusteeship for SMSFs. Let us find out how.
Is Binding Death Benefit Nomination (BDBN) the last word in terms of succession planning? Does the executors of the deceased become the trustee of his estate, too, by default? These are pertinent questions and may eventually decide who holds the largest pie in the succession battle and the money we talk about includes the amount placed in the deceased’s SMSF.