Go Bankrupt & Lose Super?

Your three safe havens to protect assets from insolvency:

1. Low-risk spouse (eg. spouse is a teacher)

2.‘Clean skin’ Family Trusts (eg. no employees)

3. Superannuation

With the downturn in the economy the Trustee-in-Bankruptcy has its eye on Super.  The latest case, Morris v Morris, shows how desperate the Trustee-in-Bankruptcy has become - such underhand tactics puts greater risk on the financial planner.

Sure, after bankruptcy, the Trustee-in-Bankruptcy can’t touch your Super received as a lump sum. However, the Trustee-in-Bankruptcy takes your Super where:

  • you transferred assets into Super to defeat creditors; and
  • you, as a bankrupt, get pension payments from Super

Ask your financial planner:

  • Why is lump sum Super protected - but pensions are lost if the beneficiary in the Will is bankrupt?
  • Why are reversionary Pensions dangerous for Will beneficiaries with few assets?
  • Five ways parents can protect their Super at death.

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