The Enduring Family Superannuation Fund™

As a SMSF is just a special type of Trust, it’s capacity to maximise its potential is derived through the rules and authority written up in the deed. At Chan & Naylor we have found that in too many instances the drawing up of this document is primarily dictated by legislation with little or no emphasis given to its practical use or the ability to maximise the benefits to a member.

We therefore sought to build our own deed with the assistance of  those in the profession and users who understand the practical benefits that are available within a SMSF. The Enduring Family Superannuation Trust  was born and is now trademarked under Chan & Naylor and only available throughout the Chan & Naylor network.

 

The Enduring Family Superannuation Fund™:

 

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What is the Enduring Family Superannuation Fund™?

The Enduring Family Superannuation Fund™ Deed was developed as a flexible SMSF for the family, controlled by the family for their long term financial care with significant tax and estate planning advantages.

It was set up to more easily increase and leverage its practical benefits with the help of a
family superannuation fund advisor.

It incorporates all the legislative requirements which our experience shows are absent from
traditional retail, industry and master funds as the rules in these funds must be written to cater for all members not just for the benefit of a few.

The Chan & Naylor Enduring Family Super Fund™ is the same skeleton tax structure as a DIY super fund and a SMSF butthe key focus is on the family and improved functionality to allow the trustees to avail themselves of all possible superannuation strategies.


What is the difference between Enduring Family Superannuation Fund™ and the DIY or SMSF fund?

To see the difference between the Chan & Naylor Enduring Family Superannuation Fund and the DIY or SMSF fund consider some of the following Enduring Family Superannuation Fund strategies:

  • An adult child member in the fund has an accident and spends six months off work.  The trustees of the Family Super Fund can begin to pay out salary continuance benefits to the incapacitated member to ensure that their salary and wages are kept to a level they were before the accident.
  • The retiree members of the fund – aged over 60 use some of their superannuation benefits to fund a deposit on a property that is acquired with a loan from a bank.  However the younger members of the fund – their children aged 40 and 38 who are also members of the Enduring Family Super Fund pay off the loan with on-going salary sacrifice contributions made by their employer.  If the property is ultimately sold any capital gain is split between the family members relevant to their capital investments. While it is being rented the pre retirement members are reducing their tax liabilities on contributions to fund any negative gearing.   Any other properties (purchased earlier) producing a positive income flow can go to those in person stage at zero tax.
  • Mum is the sole remaining parent member of the fund and has been diagnosed with dementia.  The adult child members are in the fund guiding her superannuation benefits towards the best in health and psychological care for their mother.

What is the difference between Enduring Family Superannuation Fund™ and the DIY or SMSF fund?

To see the difference between the Chan & Naylor Enduring Family Superannuation Fund and the DIY or SMSF fund consider some of the following Enduring Family Superannuation Fund strategies:

  • An adult child member in the fund has an accident and spends six months off work.  The trustees of the Family Super Fund can begin to pay out salary continuance benefits to the incapacitated member to ensure that their salary and wages are kept to a level they were before the accident.
  • The retiree members of the fund – aged over 60 use some of their superannuation benefits to fund a deposit on a property that is acquired with a loan from a bank.  However the younger members of the fund – their children aged 40 and 38 who are also members of the Enduring Family Super Fund pay off the loan with on-going salary sacrifice contributions made by their employer.  If the property is ultimately sold any capital gain is split between the family members relevant to their capital investments. While it is being rented the pre retirement members are reducing their tax liabilities on contributions to fund any negative gearing.   Any other properties (purchased earlier) producing a positive income flow can go to those in person stage at zero tax.
  • Mum is the sole remaining parent member of the fund and has been diagnosed with dementia.  The adult child members are in the fund guiding her superannuation benefits towards the best in health and psychological care for their mother.

Benefits

Some of the benefits of the Enduring Family Superannuation Fund™

  • Proportional voting
  • Retain funds in the fund for the family after member’s death
  • Use of lump sum payment strategy in transition to retirement
  • Improved asset protection
  • Anti detriment deduction
  • Termination payment on death and disability
  • Auto reversionary pensions – allows a member to nominate who will continue receiving a pension on their death
  • Ability to define financial dependents
  • The ability to incorporate a SMSF Will – ensures your wishes for distribution are carried out
  • Ability to include children under 18 years of age

 


Frequently Asked Questions

I have a SMSF – can this be turned into a Family Super Fund or do I have to get some more documentation or a different trust deed?

Provided you are using a Chan & Naylor SMSF trust deed, which has in-built Family Superannuation Fund strategies and options, there is nothing preventing you and your family using your SMSF as a Family Superannuation Fund.  For those with another SMSF trust deed, it is a simple process to upgrade the rules of the fund to a Chan & Naylor Enduring Family Superannuation Fund trust deed.

 

I don’t want to bring my children into the fund and they take control when I get older.

This is a key benefit The Enduring Family Superannuation Fund. When a child, brother, sister or grandchild becomes a member of the fund they must become a trustee of the fund or director of the fund’s corporate trustee if the fund has one. For child members under the age of 18, one of their parents can act as a trustee or director on their behalf. Under the trust deed each trustee is given the same number of votes for each $1 sitting in the account balance of the member they represent.

 

I have three children how do I get all of them into the fund?

The limitation of these small superannuation structures is that only four members can reside in the fund at any one time. This means that the controllers of a Family Super Fund -generally the parents need to choose who is best to occupy the fund at that point in time. As with children living at home, at some stage a child’s benefits and personal family circumstances may see them commencing their own Family Super Fund with their spouse and children -this may leave an opening in the parent’s fund, which may be filled by another child. Alternatively, for sizable funds it may be wise to consider two or more Family Super Funds to cover the immediate and possibly the extended family.

 

Is my super balance protected if I go bankrupt?

Normally, yes but the Enduring Family superannuation fund is set up in such a way that if you go bankrupt say after age 60, then the fund can pay you a lump sum, which is protected while pension payments are not protected.

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