A         The assets of your Superannuation fund do not form part of your estate unless your nomination of beneficiary instructions provide for this.  The Testamentary trusts you refer to will settle your estate outside of Superannuation.  Typically your spouse would be the primary beneficiary of your Superannuation fund with the residuary passing to your children on her death.  In either case, any tax losses will remain with the Superannuation fund and cannot be transferred, sold or rolled over.  Likewise you cannot “sell” an SMSF.

The tax on Superannuation proceeds depends on who the beneficiaries are and their dependency status.  Your wife would receive proceeds tax free however your adult children would pay tax as non dependent beneficiaries at 15% on the taxed element of the fund.

Carry forward losses to a SMSF fund can be used to offset future tax on income or Capital Gains in the fund.  This is of benefit to members of the fund in accumulation mode.  If you are in Allocated Pension mode, there is no tax on earnings within the fund so the offsets are of no benefit.  Assuming your children’s Superannuation funds are in accumulation mode, you could admit the children to the fund and appoint them as Trustees.  However an SMSF is restricted to only 4 trustees or a Corporate Trustee with members as directors but limited to 4.  So who do you appoint?  Who controls the assets and investment decisions? Your children would need to be prepared to have their Superannuation in the same fund as their siblings and parents.

A looming Estate Planning problem for the Baby Boomer generation will be who takes responsibility to run their SMSF funds when they are too old to do so?  The majority of  Trustees must have capacity to make decisions. Part of your planning will need to prepare for this possible eventuality.  Alternatives are to appoint additional trustees and members, establish Enduring Powers of attorneys for Trustee members or rollover or cash out elderly member’s funds.

You have a number of challenges, your wish to utilize tax losses and your children’s wishes when they inherit your wealth. These intergenerational Wealth transfer questions need to be discussed with all stakeholders and professional advice sought.