Placing restrictions on access to superannuation benefits upon death

It is often the case that SMSF members will want to place restrictions on control or access of their superannuation benefits passing to their spouse or partner, upon death.

These restrictions may arise if there is concern that any death benefits passing to a surviving partner or spouse (particularly as a pension) may be at risk due to a vulnerability (e.g. cognitive decline). While these restrictions can be made in a person's Will, it is important that they be written in an SMSF Will to ensure that the death benefits remain in the superannuation environment and are paid up to a beneficiary's Transfer Balance Cap.

Because of the requirements of section 17A(3)(a)(ii) of the SIS Act, it is useful for the appointment of a Fund Guardian ( who may be the member's Adviser) to ensure that the vulnerable member does not abuse the payment of any death benefits passing with any restrictions imposed under the SMSF Will. These restrictions may include the restriction on the income stream amount paid above the minimum payable or the commutation of any income stream.



Where appropriate, similar restrictions can be imposed on a second spouse/partner in a blended marriage where there is a concern to protect and preserve the capital of an income stream for the benefit of, say, children of a previous relationship.

These are just some examples of how an adviser with access to the right tools and resources can help their SMSF clients better manage their affairs on death and better protect the wealth they have helped accumulate.

With its sophisticated legal bot and access to a panel of specialist lawyers and tax advisers, Inherit Australia can help you manage these issues and place you at the forefront of managing your client's wealth on death.