Directors of Insolvent businesses can now continue to order goods or services from you without being held personally liable. Covid-19 has seen the Federal Government extended the leniency of Australia’s Insolvency Laws.
Current Issues Impacting Your Superannuation
We would like to take this opportunity to urge caution when considering accessing your superannuation balance early. Depending on your age a withdrawal of $20,000 from your superannuation may have a devastating impact on your superannuation balance at retirement.
Accessing Your Superannuation Early
The Governments announcement allowing Australians to access their super early has been met with an overwhelming response. We would like to take this opportunity to urge caution when considering accessing your superannuation balance early. Depending on your age a withdrawal of $20,000 from your superannuation may have a devastating impact on your superannuation balance at retirement.
The New Breed of ATO Scammers
Have you, or someone you know, received a scary voice mail demanding immediate payment of a tax debt or risk a warrant being issued for immediate arrest?
Am I Liable for Payroll Tax on my Contractor Payments
Most businesses are good at identifying what wages need to be included, but don’t always consider the payments they make to contractors.
Binding Death Benefit Nominations
In the event of your death, do you and your partner know what happens to the relevant Self Managed Super Fund (SMSF) account balance and perhaps any insurance proceeds?
It is important to remember that the payment of death benefits from a SMSF is determined by the fund’s Trust Deed and not your Will.
You can direct how you would like your SMSF death benefits to be paid by putting in place a Binding Death Benefit Nomination (BDBN).
A BDBN is a notice given, by the SMSF member to the trustee of their fund, directing the fund to pay their death benefit to a nominated dependent and/or a legal personal representative. Without a valid BDBN in place, the super fund trustee will determine who will receive the death benefit.
Cases where BDBNs have failed due to poor execution:
- Munro v Munro (2015) QSC 61
- Katz v Grossman
In the case of Katz v Grossman, the deceased left a son and a daughter. The deceased’s Will provided that his estate assets were to pass equally to his to children. Part of the deceased’s wealth included about $1 million in a SMSF. Following the death, the SMSF was in the daughter’s control. The daughter caused the superannuation death benefit to be paid directly to her, and not to the deceased estate. Accordingly, the son did not receive half the superannuation as intended by the deceased. The court determined that the daughter was legally able to do this.
In Munro v Munro (2015) QSC 61, the deceased left two daughters from a previous marriage and a current spouse with a daughter from a previous marriage. Mr Munro’s two daughters were appointed executors of his estate along with Mrs Munro. Mr Munro had signed a binding death benefit estate. After Mr Munro’s death, both Mrs Munro and her daughter (no relation to Mr Munro) were trustees of the SMSF. The SMSF trustees gave notice to the executors that they intended to exercise their discretion, as trustees, in paying Mr Munro’s superannuation benefits on the basis that they considered the death benefit nomination invalid for the purposes of the trust deed.
Mr Munro’s two daughters (two of the three executors of his will) sought a court order that the nomination was binding on the trustees. The court held that the death benefit nomination was not binding as required by the superannuation law and the SMSF’s trust deed; so the trustees were not bound by it. This meant that Mr Munro’s superannuation death benefit was not paid to his estate as he intended.
Completing a valid BDBN will allow you to nominate how your super fund payout is distributed upon your death. This allows the nominated individuals immediate access to these funds and allows peace of mind for those left in a period where there can be financial strain or frozen bank accounts.
If you would like us to organise your BDBN, or receive further information, please email us at: [email protected]
The information presented in this document was prepared for discussion purposes only and should not be relied upon for decision making. You should consult a professional financial adviser if you require additional information. This information has been prepared by Bishop Collins Wealth Management Pty Ltd – Financial Services (Corporate Authorised Representative (No 1242273) of Primestock Securities Ltd ABN 67 089 676 068 Australian Financial Services Licence 239180).