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Lawyer outlines estate planning tips for accountants’ clients

One industry lawyer has outlined methods accountants can use to keep their SMSF clients away from estate planning issues and avoid liability should a “disaster” occur.

News Katarina Taurian 05 November 2014
— 1 minute read

It is the responsibility of an SMSF practitioner that their trustee clients’ SMSF arrangements “dovetail” with the client’s broader estate planning objectives, said Ian Glenister, principal of Glenister & Co Superannuation and Estate Planning Lawyers.


Upon establishment of an SMSF – which is often carried out by an accountant – Mr Glenister said trustees should be implored, on the basis of estate planning certainty and mitigated liability, to use a corporate trustee structure.

“I have been in this space for many, many years now, and I can honestly say that I have never established an SMSF where there’s two members or more that was not a corporate trustee. Any client that has insisted that they wanted to be individual trustees, I’ve suggested that they seek and obtain advice somewhere else,” Mr Glenister said.

Practitioners should also insist that their clients have a current and valid power of attorney. He noted that if a member of an SMSF becomes incapacitated for a period that exceeds six months, the fund fails the definition of an SMSF and its assets lapse into the normal tax regime.

“Make sure the client also makes an enquiry and finds out whether the party that they’ve nominated to act as their power of attorney is prepared to act in that respect, because it’s not a legal requirement if you’re appointed someone’s power of attorney that you have to accept the decision,” Mr Glenister added.

Mr Glenister also stressed that practitioners should not be their SMSF clients’ attorney or executor, labelling it “marvellous ammunition as far as conflict of interest is concerned”.

Trustees should also have a valid, non-lapsing binding death benefit nomination, Mr Glenister said.

“If a client is going to have a non-binding death benefit nomination, why would you do it? Why would you have a non-binding death benefit nomination? It’s taking a shower with a raincoat on,” Mr Glenister said.

Finally, if clients don’t adhere to the estate planning advice they’re given, Mr Glenister said SMSF practitioners should issue their client with what he calls a “red letter”.

“In this letter, say, ‘We’re giving you this advice; for whatever reason you’re determined not to adhere to that advice. When something goes wrong as a result of you not adhering to our advice, we will not be held responsible’,” Mr Glenister said.

“Make sure it’s not your fault.”


Lawyer outlines estate planning tips for accountants’ clients
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