On the setting up of a self managed superannuation fund (SMSF), the starting position is that, all members are required to be individual trustees or directors of a corporate trustee. However, life events such as incapacity and death, may require someone to fill the shoes of the replaced individual.
This session explores how this works in practice, including:
What role does a fund’s deed and company constitution, if applicable, have in determining a replacement trustee?
How significant is the role of shareholder of an SMSF corporate trustee?
succession of trustee
control of the SMSF
Enduring power of attorneys (EPOAs)
Lessons from cases
How is the fund taxed if a breach of the required number of trustees appointed occurs?
Checklist of action to take for trustee appointment:
on incapacity of a member
on death of a member
Leaving one person in control of an SMSF where another person is to benefit from the death benefits is a common issue we come across. In particular, where blended families are involved. Solutions include:
Second or separate super funds – especially for second spouses (eg Re Marsella);
Control of the shareholding in the SMSF corporate trustee – eg even where the surviving second spouse is the surviving director, the shares in the corporate trustee could pass to the children;
Guardian role in the SMSF eg even where the surviving second spouse is the surviving director/trustee, the children could be the guardians of the SMSF with the power to appoint and remove trustees;
BDBNs – this removes discretion but can still be problematic if the non-recipient is in control of the SMSF (eg Wooster v Morris).
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