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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