If last year is anything to go by, around 40,000 self-managed superannuation funds (SMSFs) will be established in 2014. Most of these (around two-thirds) will have two members – typically a husband and wife duo or long term de facto or same sex partners.
Involving your spouse in your fund makes it a ‘family’ superannuation fund, which starts to create a sense of family wealth. Being able to share the responsibility and plans for the future with your spouse can make running your own super fund a lot easier. Even if your other half isn’t too keen on knowing the nuts and bolts of how the fund works, it pays to keep them up to date with what’s happening even if it’s at a lighter level than your own involvement.
That’s because under super law your spouse is able to ‘inherit’ your super balance in the event of your death, without having to withdraw the investments out of the fund. This means that the investments you have selected as being of value to you and your family can survive you and can be continued on by your spouse.
While I am a great supporter of super, and understand how having an SMSF can be the right super option for many people – I have one myself – the flip-side is that it can be messy, and potentially expensive, to split the assets of an SMSF if you and your other half decide to end the relationship. This is certainly something to bear in mind if your relationship is looking rocky. Certainly, if you are in the throes of divorce, it’s essential you get good, professional advice on how your super, your spouse’s super, or any super you jointly own such as through an SMSF is treated and divvied up in the property settlement. A key consideration here is weighing up the pros and cons of receiving money now, as opposed to receiving a super payout some time – and perhaps a long time – into the future.
For more information on super in general, and self-managed super in particular, take a look at my new book Control Your Own Super Fund. Click here to purchase from Penguin Books.
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