Disclosure Statement: Durand Financial Services Pty Ltd and its advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. General Advice Warning: The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances.
By Tim Miller
(Miller Super Solutions)
If I write an article linking Game of Thrones to an SMSF does that mean my recent series 6 blu-ray acquisition is tax deductible as a business expense?
I’m not sure what’s more disturbing to some, the fact that I’m referencing a pop-culture TV show to highlight the difficulties of recommending an SMSF or the fact that I paid for a blu-ray box set rather than downloaded the series!
Let’s begin with the Lannister family, arguably the most powerful family in Westeros (let’s call it WesterAUS to ensure we satisfy the definition of an Australian Superannuation Fund). They provide us with the ultimate case study of “know your client”!
Cersei Lannister and Robert Baratheon (married) presented themselves to me with a request to establish an SMSF for them. On face value they appeared to be happily married with three children, Joffrey, Myrcella and Tommen who were all under the age of 18 when the fund was established. They had significant wealth both inside and outside of superannuation due to Robert’s job and Cersei’s likely inheritance from her wealthy father. On face value an SMSF seemed logical.
Unfortunately Robert passed away leaving it up to his legal personal representative, Ned, to step in as trustee to assist Cersei pay out Robert’s benefits.
This is where things started to get awkward as Ned and Cersei never had a trusting relationship and Robert did not leave a binding death benefit nomination rather he had expressed his wishes to Ned who perhaps interpreted them a little different to what Cersei understood…..he nominated his rightful heir. Ned was aware that Robert had a child from a previous relationship but he was also aware that the three children named above were from a relationship Cersei had with another man, not Robert, something Cersei had not disclosed to Robert. It was Ned’s desire to pay Robert’s benefit to his Estate where it could be managed by his surviving brothers ensuring that his son would be looked after.
Of course this situation lead to an impasse which was further complicated when Ned as the Legal Personal Representative (LPR), Robert’s brothers and very sadly the three children all passed away during the protracted dealings. This has left Cersei holding the purse strings and Robert’s legitimate child without representation and without a binding solution.
The end result is that if I had known everything about the clients upfront I may not have recommended they establish an SMSF and I certainly may not have considered an SMSF be in their best interest, although in saying that, perhaps an SMSF was absolutely the right superannuation vehicle and it was just the member’s estate planning that was inadequate.
General Advice Warning:
The information provided is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. It is not intended to be and does not constitute financial advice or any other advice.You need to consider your financial situation and needs and should seek professional advice before making any decisions based on this information.
Miller Super Solutions is the SMSF education & training creation of Tim Miller, assisting SMSF professionals and trustees with the practices associated with establishing, running and ultimately closing down SMSF’s. www.millersupersolutions.com.au