Passing specific SMSF assets on death to beneficiaries

For estate planning purposes, clients may wish to identify specific assets within their fund to be transferred to a specific beneficiary and possibly up to the value of their member account balance. This is typically, managed via an SMSF Will. This can be beneficial for two reasons. Firstly, it may not be desirable if there is a risk of an estate challenge or dispute for the SMSF assets to pass through the estate. A transfer of SMSF assets to the estate could potentially enlarge the estate assets that may become subject to a family provision claim. If there is a risk of challenge arising within 6 months from the date of death, a “switch clause” can be inserted into the SMSF Will to allow the beneficiary the option to elect to take the SMSF asset directly or through the estate into a testamentary trust for better long term protection and tax efficiency.

The second reason is that a client may require a specific asset such as real business property to pass to a family beneficiary working in a family business. With the use of other estate assets and contribution limits, it may be possible for the business real property to remain within the fund for the benefit of the beneficiary who may become a member of the fund. The SMSF Will or the estate Will can, if appropriate, adjust the value of these assets passing to a beneficiary from the SMSF to ensure equality of distribution amongst beneficiaries.


Making distributions to family beneficiaries via an SMSF Will must be permitted via the terms of the trust deed that allows for the specific adjustment and in specie transfer of assets on death as well as a "standard" death benefit nomination

Inherit Australia bot contains an extensive investigation into the SMSF and a client's wish to distribute specific assets from the fund. Our new value pricing means that lawyers can create, generate or adapt the documents to the clients’ circumstances.