Australian Estate Planning Checklist: Wills, Powers of Attorney and Super

Estate planning is not just for the wealthy - it is for anyone who has assets, a partner, children, or preferences about what happens if they become incapacitated or die. Without these documents, the state imposes defaults that may not reflect your wishes and can create expensive, time-consuming legal processes for the people you leave behind.

• 1. Will: A legally binding document that directs how your estate (assets held in your personal name) is distributed after death. Without a valid will you die 'intestate' - state intestacy laws determine distribution, which may not match your wishes and may not provide for de facto partners or stepchildren. Requirements vary by state but generally: in writing, signed in the presence of two adult witnesses (who are not beneficiaries), and the testator must have legal capacity.
• 2. Enduring Power of Attorney (EPOA): Appoints a trusted person (attorney) to manage your financial and legal affairs if you lose capacity. 'Enduring' means it remains valid after you lose capacity - a standard POA ceases at incapacity. Without an EPOA, family members must apply to the Administrative Appeals Tribunal (AAT) or equivalent state body for a financial management order - a costly, slow process. Each state/territory has its own EPOA legislation and forms.
• 3. Advance Care Directive (ACD) / Enduring Guardianship: Appoints someone to make medical and personal decisions on your behalf if you cannot. In some states this is a separate Enduring Guardianship appointment; in others it is combined with the ACD, which records your preferences about medical treatment, end-of-life care, and living arrangements. Different legislation in each state - get legal advice specific to your state.
• 4. Superannuation Binding Death Benefit Nomination (BDBN): Super does NOT automatically form part of your estate - it is distributed by the fund trustee. Without a BDBN, the trustee has discretion to pay to any eligible dependant or your estate. A BDBN directs the trustee to pay a specified person or your estate. Critical rules: (a) Standard BDBNs lapse after 3 years and must be renewed - calendar this. (b) Non-lapsing BDBNs are available in some funds and SMSFs. (c) Recipients must be dependants (spouse, child, financial dependant, interdependant) or your legal personal representative (estate). (d) Non-dependants (e.g. adult children) who receive a super death benefit from your estate may pay 17% death tax on the taxable component.

---

Super is the largest asset for many Australians at retirement - yet it sits outside the will. Getting super estate planning wrong can cost beneficiaries tens of thousands in avoidable tax.

• Dependant vs non-dependant tax: Super death benefits paid directly to a tax dependant (spouse, child under 18, financial dependant, interdependant) are tax-free. Paid to a non-dependant (e.g. adult child) - either directly or via the estate - a 17% flat tax (plus 2% Medicare) applies to the taxable component. On a $500,000 super balance with 80% taxable component, this is $68,000 in avoidable tax if the nomination is wrong.
• Re-contribution strategy: Before death (or before health deteriorates), a member over 60 can withdraw tax-free and re-contribute as a non-concessional contribution - converting taxable component to tax-free component. This reduces the death tax payable by non-dependant beneficiaries. The non-concessional cap is $120,000/year ($360,000 under the bring-forward rule for eligible members). Cannot be done after death.
• Reversionary pension nomination: If you are drawing a super pension, nominating a reversionary beneficiary (typically your spouse) means the pension automatically continues to them at your death - with a 12-month grace period before it counts against their Transfer Balance Cap ($1.9M for 2024–25 and indexed annually).
• SMSF-specific considerations: SMSF trust deeds must specifically allow non-lapsing BDBNs - not all do. Check the trust deed before relying on a non-lapsing nomination. If both members of a two-member SMSF die simultaneously or close together without a BDBN in place, a reversionary nomination, or an independent trustee, the fund may require a court-appointed trustee to finalise - expensive and slow.
• Life insurance inside super: Death benefit proceeds from insurance inside super are paid to the fund first, then distributed according to the BDBN rules - not directly to the nominated beneficiary on the insurance policy. Ensure your BDBN covers these proceeds.

---

A testamentary trust (TT) is a trust created by a will that comes into existence at death. Unlike a living trust, there is no stamp duty on establishment and assets are transferred at death. TTs provide significant tax and asset protection benefits - but add complexity and annual compliance costs.

• Tax benefit for minor beneficiaries: Income distributed to minors from a testamentary trust is taxed at adult marginal rates (not the punitive 'kiddie tax' rate of up to 47% that applies to trust income from a living discretionary trust). This can save substantial tax if you have grandchildren or minor children as beneficiaries. IMPORTANT: the Division 6AA advantage that once applied to trust income splitting for minor beneficiaries was removed from July 2019 - testamentary trust income for minors retains the adult rate advantage, but standard family trust distributions to minors do not.
• Asset protection: Assets held in a TT are not owned personally by the beneficiary - creditors of the beneficiary generally cannot access TT assets. This protects inheritance from a beneficiary's business failure, divorce, or bankruptcy.
• Discretionary distribution: The trustee (often your surviving spouse or a professional trustee) can distribute income each year to the most tax-effective beneficiary - flexible in response to changing circumstances.
• When a TT is worth the cost: Generally worthwhile when the estate exceeds $500,000–$750,000 and there are minor children, adult children with business risk, or significant income-producing assets. Annual compliance costs (accounting, trustee fees) typically run $1,500–$4,000/year per TT.
• Letterbox company as corporate trustee: Using a corporate trustee for the TT (a company whose sole purpose is acting as trustee - sometimes called a letterbox company) provides continuity of the trust when individual trustees die or lose capacity. The company continues; only the director needs to change. Cost: ~$600 to establish, $59/year ASIC annual review fee.

---

Use this checklist to identify gaps in your current estate planning. Review and update whenever there is a major life event - marriage, divorce, new child, significant asset acquisition, death of a named executor or beneficiary.

• Will: Do you have a current, valid will? Is it stored safely (with your solicitor, in a fireproof safe, or at the Supreme Court in your state)? Does your executor know where it is? Has it been updated since your last major life change?
• Enduring Power of Attorney: Do you have an EPOA in each state where you own property? Is your chosen attorney willing and capable? Have you given your attorney a certified copy?
• Advance Care Directive / Enduring Guardianship: Does your nominated guardian know your medical preferences? Is the document compliant with your state's current legislation?
• Superannuation BDBN: Have you lodged a valid BDBN with each super fund? Check the expiry date - standard BDBNs lapse after 3 years. Does the nomination reflect your current family situation? Is the recipient a dependant or your LPR?
• Life insurance beneficiary nominations: Check each policy - life insurance outside super usually has a direct beneficiary nomination. Is it current? Does it align with your will?
• SMSF trust deed: If you have an SMSF, has the trust deed been reviewed in the last 5 years? Does it allow for non-lapsing BDBNs? Is there a succession plan for the trustee?
• Testamentary trust: Is your estate large enough or complex enough to warrant a TT? Has your solicitor modelled the tax savings vs compliance costs?

---

Estate planning protects what you've built - Roopon helps you build more of it. Members access exclusive weekly discounts on groceries, fuel, dining, health services and more from Roopon's Australian partner network. from $19.99/month, the cost is negligible compared to the savings.

Active members can win cash or other prizes in the published campaign (see /giveaways) - a meaningful head start on a savings goal, a super contribution, or a consultation with an estate planning solicitor. Join at roopon.com.au and check this week's deals and draw.

---

Join Roopon today for exclusive member discounts plus FREE included prize-draw entries per your plan and published campaign terms.

Join ROOPON Now