Estate Planning and Wealth Transfer

Your will controls your personal assets — but not your company shares, trust interests, or SMSF balance. These pass through different mechanisms and require specific planning. Many business owners die with a current will but no plan for the business, resulting in costly disputes and forced sales. For a company, your shares pass according to your will — your executor can sell them, transfer them to beneficiaries, or manage the company on behalf of the estate. The risk: if the company has other shareholders or a shareholders agreement with buy-sell provisions, your executor's rights may be constrained. Review your shareholder agreement specifically for death/incapacity provisions. For a discretionary trust, your interest as beneficiary passes under your will. But the trustee role — which controls distributions — is governed by the trust deed's succession clause. Many trust deeds appoint a default successor trustee (e.g., spouse, then children). Review your trust deed's succession clause to ensure it reflects your current wishes and won't hand control of the trust to someone inappropriate.

Superannuation does not automatically form part of your estate — it passes according to your fund's governing rules and your binding death benefit nomination (BDBN). Without a valid BDBN, the trustee of your fund uses discretion to determine who receives your super, which may not align with your intentions. BDNs can only be made in favour of dependants (spouse, children under 18, financial dependants) or your legal personal representative (estate). Non-lapsing BDBNs don't expire (unlike the standard 3-year lapsing nomination). For an SMSF, you can create a non-lapsing BDBN as a trustee decision — update this when your personal circumstances change. The tax on super death benefits varies: paid to a tax-dependant (spouse, minor children) = tax-free. Paid to adult children or other non-dependants = the taxable component is taxed at 15% + Medicare levy (17%). This means an adult child receiving $500,000 in super (if all taxable) pays $85,000 in tax. Estate planning strategies to minimise this include: gradual withdrawal strategies in pension phase before death, testamentary trusts, and 'recontribution strategies' to convert taxable components to tax-free.