People are accumulating a lot of wealth within their super without realising a legally binding will won’t direct where that money goes after their death, a chartered accountant has warned.
Simone Palfreyman, of Palfreyman Chartered Accountants, has flagged that “even though you might have quite a good will set out that specifies who is going to inherit your money, that’s not binding on your superannuation”.
Calling it “a massive issue” that Australians need to be aware of, Ms Palfreyman said “clients need to be aware that they have to address their beneficiaries within their super fund as well as having their own will for assets outside of superannuation”.
Despite the need for greater awareness, the chartered accountant did consider that “it’s really a responsibility of the accountants and the financial advisers to basically inform the clients that they need to have considered things like a binding death nomination within their super fund”.
In her practice, Ms Palfreyman outlined the first step for provision of estate planning is to recommend an individual to have a decent will, “and that they actually use a legal provider to actually do that will rather than doing an off-the-shelf, do-it-themselves version”.
“We do recommend with their superannuation that they have binding death nominations and that they carefully review those binding death nominations because that’s what determines who will inherit the money if you do pass away — your super.”
It’s just as important a consideration for individuals controlling self-managed super funds, the chartered accountant flagged.
“If they’ve got a self-managed super fund, they’ve got to be very careful about who we’re going to be the replacement executive essentially for the super fund itself, because they control then who actually inherits the money from the super fund,” she explained.
“We’ve actually found, unfortunately, that ASIC has made it quite difficult, with accountants not being able to provide as much super advice as we used to be able to, and a lot of people unfortunately don’t want to pay the money to go see a financial planner or financial adviser.”
As a result, Australians aren’t actually being told that there are these issues and “they’re just not aware”.
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Article reproduced from Nest Egg bu Grace Ormsby