Has the Govt over-complicated estate planning?
The Government’s succession of Budget-related superannuation changes have had an enormous impact on estate planning that was not recognised at the time they were introduced, according to the SMSF Association.
SMSF Association chief executive, John Maroney said the SMSF industry was still working through what represented far-reaching policy and legislative changes which took effect on 1 July, last year, and which had fundamentally altered the landscape for SMSF members and advisers.
He said this was particularly the case with respect to areas such as estate planning and death benefits.
“In the lead up to 1 July 2017, the industry’s focus was on optimising contributions and reducing pension accounts to under $1.6 million as well as considering CGT relief for those affected by the transfer balance cap and transition to retirement changes,” Maroney said. “A consequence of this understandable focus on these issues requiring immediate action was less attention being paid to the longer-term strategic consequences of the changes.
He said that now the industry had had time to reflect on the changes, it had recognised the enormous impact on estate planning that was not appreciated at the time the changes were introduced.
“It’s also had the effect of making death benefits, always a complex issue, even more complex,” Maroney said. “The reality now is that SMSF members who fail to appreciate what these changes mean, or fail to get specialist advice, could find themselves being forced to move money out of superannuation.”
Maroney says that the transfer balance cap, total superannuation balances and SMSF event-based reporting are all new concepts that advisers and SMSF members are working on together.
“There is no doubt these changes have increased the complexity and compliance burden of the system, although the Association’s concerns have been allayed somewhat following detailed discussions with the ATO and the Government.
“But the increased complexity can’t be denied, and advisers are urged to speak regularly with their clients, to streamline and assess their processes, and take every opportunity to increase their technical knowledge.”
Recommended for you
The Financial Services and Credit Panel has made a written order to a relevant provider after they gave advice regarding non-concessional contributions.
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
