SUPER CHANGES AND ESTATE PLANNING

 

 

1 July 2017 marked big changes to Australian superannuation – making a confusing set of rules even more complex. These changes have significant implications for estate planning.  You may think you are leaving your loved ones with your wealth, but you may actually be leaving them a burden.

SUPER LIMITS AND COUPLES


Much focus has been placed on the $1.6 million super caps and how it applies to individuals.  What is often forgotten is the impact this rule has on couples. 

If you and your spouse’s combined super equals more than $1.6 million and one of you dies, you may have an issue.

  • The surviving spouse’s ability to retain as much as possible in super may be limited.
  • New super rules state that if you have more than $1.6 million in the retirement (pension) phase, you will be required to cash the excess out of super completely.
  • The surviving spouse may have 12 months or less to re-structure their affairs to retain the most they can in super.

 

 

TIME FOR A NEW ESTATE PLAN

In the past, when formulating an estate plan, it was common for couples to leave their super to one another in the form of super pensions. This way, when one partner died, the surviving spouse would continue to receive their loved one’s super.

Now that a super cap has been put in place, careful consideration is required to determine whether leaving your super to your partner is appropriate for your situation.

If your combined super exceeds the $1.6 million cap, you should speak to an expert immediately about updating your estate plan.  In calculating your combined total, don’t forget to include any life insurance cover you may have in super, in addition to your individual balances.

Some of the options available to you if your combined super exceeds the cap include:  

  • Restructuring your super to keep it under $1.6 million
  • Choosing the most appropriate super pension to meet your needs
  • Establishing a superannuation proceeds trust or testamentary trust
  • Leaving your super to a minor or disabled child by way of a child pension

SPEAK TO A SUPER EXPERT

Let our super experts cut through the complexity and help you put the right super strategy in place for your personal circumstances.

SPEAK TO A SUPER EXPERT

Call us on 1800 631 381 or leave your details and a Perpetual adviser will be in touch.

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Perpetual Private advice and services are provided by Perpetual Trustee Company Limited (PTCo) ABN 42 000 001 007, AFSL 236643. 

This information has been prepared by PTCo. It contains general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider, with a financial or other adviser, whether the information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.