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smsf trustee succession plan

Do I need an SMSF Trustee succession plan?

Creating a robust SMSF trustee succession plan is critical for Self-Managed Super Funds (SMSFs) managed by aging trustees.
An effective succession plan ensures the smooth transition of control and management of the SMSF when the original trustees are no longer able or willing to manage the fund due to age, health, or other reasons. A trustee succession plan must encompass preparation, clear communication, and legal compliance.

Understanding SMSF Trustee Succession


SMSF trustee succession plan involves preparing for the future management of the SMSF, ensuring it continues to operate effectively and complies with Superannuation Industry (Supervision) Act 1993 (SIS Act) requirements. Remember to check that your new Trustee appointment is suitable and not a disqualified person to act as an SMSF Trustee.

Looking after you and your SMSF. It’s about safeguarding the fund’s assets and the beneficiaries’ interests, ensuring that the transition of trusteeship does not negatively impact the fund’s performance or compliance status.

Start planning early. It can sometimes be a difficult decision or discussion, but dealing with dignity can mean no surprises. Don’t wait for health issues or other urgent matters to force a quick decision. Early planning allows for a thoughtful, strategic approach to selecting and preparing the next generation of trustees.

It also may mean reviewing the asset composition of the fund. This may result in uncomplicating the Funds strategy or selling down investments that require the Trustee’s time and experience to manage. Consult a Financial Planner if you require assistance in this area.


Consider potential successors’ capabilities, willingness to take on the responsibility, and their alignment with the fund’s goals. Successors can be family members, friends, or professional trustees. Discussing the responsibilities and expectations with potential successors is crucial to ensure they are prepared and willing to take on the role.


Check your Fund’s Trust Deed. You may need to update it to include provisions for the succession process. Consult with legal professionals to ensure the plan is legally sound and not inadvertently compromise the fund’s compliance status.
Documentation and Communication of your Trustee strategy

Document the succession plan clearly, including the roles, responsibilities, and process for transitioning trustees. Communicate the plan to all relevant parties, including current trustees, successors, and professional advisors such as your Accountant.

Keep your potential Trustees in the loop. This may either be by making them Trustees early or by keeping them informed annually with the audited financial statements.

As a trustee of an SMSF, your primary responsibility is to manage the fund prudently. Therefore you cannot receive compensation from the SMSF for fulfilling your trustee obligations, such as overseeing investments, administration, and compliance.

Review and update the succession plan regularly to reflect changes in the fund’s circumstances, membership, or legislation. This ensures the plan remains relevant and effectively safeguards the SMSF’s future.

A well-crafted trustee succession plan is essential for an SMSF’s long-term success and stability, particularly when managed by aging trustees. By taking a proactive approach to succession planning, SMSF trustees can ensure a seamless transition that protects the fund’s assets and the financial security of its members.

Ultimately, the goal is to ensure the SMSF continues to meet its members’ retirement goals, regardless of changes in its management. When it comes to Estate planning, peace of mind is thinking outside the unexpected and dealing with sometimes hard and awkward what-if scenarios.

SMSF for Property development ventures and your SMSF

SMSF for Property development undertaken by an SMSF can be undertaken. We however strongly recommend seeking advice.
ATO has issued a warning about relates to the use of SMSFs to invest in property development in a manner that inflates the profits earned by the SMFSs when compared to the capital the SMSF commits to the venture.

An SMSF can as part of its investment strategy invest in property ventures. This is provided the investments are entered into on a genuine arm’s-length basis. As trustees, you should document your strategy including a risk analysis of the project.

If investments are entered into with related parties, even though on an arm’s-length basis, care still needs to be taken. Keep reading to understand what you should do!

A scheme that was identified by the ATO, an arm’s length third party contracts with a company related to SMSFs to build several units or apartments ie a property development. Those who control the SMSFs provide services to the company (which they control) and charge low fees to that company. Also, loan capital is provided to the development company at a low or no interest rate.


In this scheme, the development company earns inflated profits. These profits (after the company pays tax on the profits) are then paid as fully franked dividends up a chain of companies to the SMSFs.

The development company in this case will have paid tax at a rate of 30% on the profits earned. When the profits reach the SMSF as fully franked dividends, the tax paid by the company is refunded to the extent of the SMSF only paying 15% of the profits. Hence reduced tax liability

The ATO would state that this means the SMSF contravenes the superannuation and tax laws. Furthermore, this is because the SMSF is earning “non-arms length income” (NALI). NALI earned by a superannuation fund is taxed at 45%. The SMSF may also be treated as a non-complying fund because it may have breached the “sole purpose” test. This means it will have lost all of its tax-concessional status.

Tips worth noting before using your SMSF for property development:

• Limited Recourse Borrowing Arrangements (LRBA): While SMSFs can borrow to invest under LRBAs, there are strict rules about borrowing, especially when it comes to property development.
• Personal Guarantees: Trustees should be cautious about providing personal guarantees for loans, as this can risk personal assets.

Building the development and Contractor Selection: Engaging contractors for property development must be done at arm’s length,. This means competitive pricing and no preferential treatment to related parties. The building also needs good Project Management: Trustees need to actively manage the project or engage professional project managers to ensure the development is completed on time and within budget.

• Capital Gains Tax (CGT): SMSFs can benefit from reduced CGT rates on investment properties held for more than 12 months.
• Income Tax: Rental income and any profits from the sale of developed property are subject to income tax at concessional rates within the SMSF.

Exit Strategy

While an exit strategy requires a sale of property Liquidity and Exit is important considerations. Before embarking on a property development venture, consider how the SMSF will exit the investment. Property can be difficult to sell quickly, which may impact the fund’s liquidity. Especially if the member is of old age or needs to fund a pension

Understanding Superannuation Death Benefits

Superannuation Death benefits are an estate planning matter that is a crucial aspect of financial planning.
It is essential to consider what happens to superannuation upon death.
Understanding the intricate system of superannuation death benefits is essential for effective financial planning and ensuring that your loved ones are taken care of.

When a superannuation member dies, the remaining balance in their super fund and any associated insurance payouts are generally paid out as a superannuation death benefit. This benefit is intended to provide financial support to the deceased member’s beneficiaries, including their spouse or partner, children, or other dependents.

However, the distribution of these benefits is subject to various regulations and considerations, making it a complex area of financial management.
It’s important to note that superannuation death benefits are not automatically distributed according to a will.Firt thing to remember is that super funds typically provide a set of criteria for determining who is eligible to receive the benefits.


In some cases, the Fund Trustee may have discretionary power to allocate the benefit to the most appropriate beneficiaries, considering the deceased member’s relationships and financial dependents.
This is an estate planning opportunity or danger for those operating an SMSF.


With this purpose in mind, everyone should familiarise themselves with superannuation death benefits rules and options. The result is to ensure that your wishes are carried out, and their loved ones are well provided. This involves nominating beneficiaries, understanding the tax implications, and integrating superannuation benefits into estate planning strategies.


Who Receives the Superannuation Death Benefit?

A superannuation death benefit distribution is typically prioritised according to specific rules and regulations. A death benefit is first paid to the deceased member’s dependents. These include their spouse or partner, children, and any individuals financially dependent on the dead at the time of their death. If there are no eligible dependents, the benefit may be paid to the deceased member’s estate.


It’s worth noting that the definition of dependents can vary between superannuation funds and may include both financial and interdependency criteria. Understanding these distinctions is crucial for ensuring the benefit is allocated appropriately and by the deceased member’s intentions. Furthermore, the rules governing who can receive a superannuation death benefit may change depending on the specific circumstances, such as the age and marital status of the deceased member.


In cases where the deceased member has not made a binding death benefit nomination, the fund trustee may exercise discretion in determining the benefit distribution. This underscores the importance of proactive planning and communication to ensure the benefit is directed to the intended beneficiaries. By understanding the eligibility criteria and potential beneficiaries, individuals can make informed decisions regarding the nomination of superannuation death benefit recipients.


Taxation of Superannuation Death Benefits

Taxing superannuation death benefits is a critical consideration that can significantly impact the ultimate value of the beneficiaries’ benefits. The tax treatment of these benefits is influenced by several factors, including the relationship of the beneficiary to the deceased member, the components of the superannuation benefit, and the age of the dead at the time of their passing.
Generally, superannuation death benefits paid to a deceased member’s dependents are tax-free.

This includes benefits paid to the deceased member’s spouse, children, and any individuals who were financially dependent on the deceased. However, the tax treatment may differ if the benefit is paid to a non-dependent, such as an adult child who was not financially dependent on the deceased.
In such cases, the tax payable on the superannuation death benefit is influenced by the components of the benefit, which typically include taxable and tax-free elements. The taxable component of the benefit is subject to tax at a beneficiary’s marginal tax rate, while the tax-free component is not subject to tax. Understanding these tax implications is crucial for both the deceased member and their beneficiaries, as it can inform decisions regarding the nomination of beneficiaries and the potential tax consequences of the benefit distribution.


Furthermore, individuals may explore strategies to minimise the tax impact of superannuation death benefits, such as utilising binding death benefit nominations or implementing effective estate planning measures. By considering the tax implications in advance, individuals can optimise the financial outcomes for their beneficiaries and minimise potential tax liabilities.


How to Nominate Beneficiaries for Your Superannuation

Nominating beneficiaries for your superannuation is a fundamental step in ensuring that your superannuation death benefit is distributed according to your wishes. Most superannuation funds offer members the option to make binding or non-binding death benefit nominations, providing a mechanism for specifying who should receive their superannuation benefit in the event of their death.


A binding death benefit nomination legally compels the superannuation fund trustee to distribute the benefit to the nominated beneficiaries, provided they meet the eligibility criteria. This nomination must be kept current and aligned with the fund’s requirements to remain valid. In contrast, a non-binding nomination serves as a guide for the trustee but does not impose a legal obligation to follow the member’s wishes.


Individuals need to review and update their death benefit nominations regularly, particularly in the event of significant life changes such as marriage, divorce, or the birth of children. By keeping these nominations current, individuals can ensure that their superannuation is directed to the intended recipients and aligns with their evolving family and financial circumstances.


Moreover, considering the potential tax implications of superannuation death benefits, individuals may seek professional advice to structure their nominations tax-efficiently and maximise the financial outcomes for their beneficiaries. By proactively nominating beneficiaries and staying informed about the nomination options available, individuals can exercise greater control over the fate of their superannuation benefits and provide for their loved ones according to their wishes.


Claiming the Superannuation Death Benefit


Once a superannuation account holder has passed away, claiming the superannuation death benefit begins.


This involves navigating the administrative procedures outlined by the relevant superannuation fund, which may include submitting necessary documentation and fulfilling specific requirements to facilitate the benefit payment.


Step one involves notifying the deceased member’s superannuation fund of their passing and initiating the process of claiming the death benefit. This may entail providing the fund with a certified copy of the deceased member’s death certificate and completing any required claim forms. Additionally, the fund may request information about the deceased member’s beneficiaries and their relationship to the deceased, mainly if a binding death benefit nomination is in place.


The beneficiaries must engage with the superannuation fund promptly and comply with any documentation requests to expedite the processing of the death benefit claim. Delays in the submission of required information or discrepancies in the provided details could prolong the benefit payment process, potentially impacting the financial stability of the deceased member’s dependents.


During this period, beneficiaries may also seek professional guidance to ensure they understand the steps in claiming the superannuation death benefit and are equipped to navigate any potential complexities. By actively participating in the claiming process and communicating effectively with the superannuation fund, beneficiaries can facilitate the efficient distribution of the benefit and mitigate any administrative hurdles.


Options for Receiving the Superannuation Death Benefit


Upon the approval and processing of a superannuation death benefit claim, beneficiaries are presented with several options for receiving the benefit. The payment method can significantly influence the tax treatment and long-term financial implications for the beneficiaries, making it a critical decision that warrants careful consideration.


One standard option is to receive the death benefit as a lump sum payment. This provides the beneficiaries immediate access to the total benefit amount, allowing them to utilise the funds according to their financial needs and priorities. However, it’s essential to recognise that receiving the benefit as a lump sum may result in tax implications, particularly for non-dependant beneficiaries and the taxable component of the benefit.


Alternatively, beneficiaries may opt to receive the superannuation death benefit as a pension or income stream, providing a regular and potentially tax-effective source of income over an extended period. This can be particularly advantageous for dependant beneficiaries who seek ongoing financial support and prefer to manage the benefit as a long-term income stream.


By evaluating the available options and their associated considerations, beneficiaries can make choices that align with their preferences.


Superannuation Death Benefit and Estate Planning


Integrating superannuation death benefits into estate planning is critical to comprehensive financial management. By strategically aligning superannuation benefits with estate planning strategies, individuals can exert greater control over the distribution of their assets and ensure that their loved ones are well provided for after their passing.


One key consideration in estate planning is the interaction between superannuation death benefits and your will. While superannuation benefits do not automatically form part of an individual’s estate, they can be directed to specific beneficiaries through binding death benefit nominations, bypassing the probate process and providing expedited access to the benefits.
Furthermore, individuals may explore the use of testamentary trusts to manage the distribution of their superannuation death benefits. Testamentary trusts can offer increased flexibility, asset protection, and potential tax advantages for the beneficiaries, making them a valuable tool in structuring the inheritance of superannuation benefits.


In addition, those with self-managed superannuation funds (SMSFs) may consider including a comprehensive succession plan within their fund’s trust deed.

Ultimately, by integrating superannuation death benefits into their broader estate planning framework, individuals can exert more significant influence over the allocation of their assets and provide their beneficiaries with a secure and efficient inheritance process.


Seeking Professional Advice on Superannuation and Death Benefits


In conclusion, the fate of superannuation after death is a crucial aspect of financial planning that warrants careful consideration and proactive management. Understanding the intricacies of superannuation death benefits, including the eligibility criteria, tax implications, and distribution options, is essential for ensuring that the benefits are directed to the intended recipients and aligned with the deceased member’s wishes.
Individuals should prioritise the nomination of beneficiaries for their superannuation, regularly review and update their nominations, and integrate superannuation benefits into their broader estate planning strategies. Seeking professional advice from financial advisors, estate planning experts, and taxation specialists can provide invaluable support in navigating the complexities of superannuation death benefits and optimising the economic outcomes for the beneficiaries.


By proactively engaging with these considerations and seeking professional guidance, individuals can secure the financial well-being of their loved ones and ensure that their superannuation benefits serve as a lasting and impactful legacy. Empowered with the knowledge and resources to navigate the labyrinth of superannuation after death, individuals can approach this critical aspect of financial planning with confidence and clarity, ultimately shaping a secure future for their be

Retirement and your home and SMSF property

Can I Live in SMSF Residential Property upon Retirement?

Can you live in SMSF residential property held by your Fund?” No not directly, but follow the rules at retirement, and it may be possible.

As you retire, retirement planning opens up opportunities for living and the next stage for your SMSF, your lifestyle and your needs.

An SMSF is established for the sole purpose of meeting your retirement objectives. And this is the overal objective of holding any assets in the Fund!

Retirement planning involves planning and managing your assets into the senior years of your life. Opportunities arise as clients look at the strategies such as the downsized option for superannuation contributions along with other strategies. At this stage in life, you may wonder if you can live in the SMSF residential property after retirement. The property may be a residential holiday letting or an apartment.


Unfortunately, there is a misconception that you can move into the SMSF property as soon as you retire, regardless of whether the property is still in the SMSF. This is a big misconception as, at present, the Trustee of the Fund still owns the property, and it still forms part of your existing investment strategy.

Selling the residential property to a member prior to retirement is not allowable as it may breach the non-arms-length rules.

To live in SMSF residential property, it is necessary to transfer an asset to a member upon retirement

The Trustee, upon retirement, may provide benefits to the retiring member by utilising the major asset directly to satisfy the benefit by an in-specie transfer.

Member payments are the distribution of the member’s superannuation entitlement within the SMSF. The benefit is calculated based on the proportion of net assets at market value. Accessing superannuation entitlements is subject to conditions of release.

These conditions include reaching age 65, or, retirement, or medical incapacity. Not meeting one of these conditions means members cannot access their superannuation entitlements from the SMSF
Transferring the residential property from an SMSF as a Member Payment at Retirement.

As the Trustee of the SMSF, which is you, can determine that it will pay a lump sum. Your decision will be to sell the property or assets or undertake an in-specie transfer to the member.

Another term used for residential property transfer from an SMSF is known as an “in-specie transfer.”

In this case, the market value of the asset transferred within the SMSF decreases the member’s balance drops by the same value to reduce the amount held by the Fund on the member’s behalf.

How do you ensure the property transfer is done right?

A property that can be held in a superannuation fund can be transferred out of the Fund to satisfy as a member payment providing it meets the SIS conditions.

First Step. the Trust Deed. Check that the SMSF Deed will determine whether if the Deed permits in-specie transfers of assets. The Deed also outlines any specific processes that the Trustee must follow.

The asset being transferred must be valued at its market value. Where it was part of a borrowing arrangement check that it has been fully discharged.

The member also must have sufficient member entitlements in the Fund to cover the value of the asset being transferred. Complicated transfers where the value is greater than the value of the benefit need a professional plan. Reach out, and we can help work through your strategy.

Tax and Duty Considerations


We suggest you check with your solicitor in relation to the legal matters. Your solicitor will ensure any property transfer is done correctly. As accountants, we can advise you if there will be any income tax implications behind your strategy. There may be stamp duty savings but the solicitor can help you here. Therefore to be legally binding the asset change of ownership needs to be properly documented.

Plan and do it right.

Seek advice surrounding your requirements to avoid any costly mistakes.

This article is general and should not be construed as personal advice. You should consult a qualified professional for advice specific to your circumstances.

Estate Planning and SMSF : Leveraging the Power of SMSF

Estate planning and SMSF can play a large role when it comes to Estate planning, which is an often-overlooked aspect of financial planning when executing your Will, superannuation, and wishes.

Estate planning determines how your assets will be distributed once you pass away. However, estate planning can be complicated and overwhelming, which is why Self-Managed Super Funds (SMSFs) have become popular.

SMSFs are a powerful tool for estate planning and managing your retirement savings.
Whether you’re new to estate planning or simply looking for a more efficient way to manage your assets, leveraging the power of SMSF can help you achieve your financial goals and ensure that your assets are distributed according to your wishes.

estate planning

Understanding SMSF and its benefits for estate planning

SMSF is a type of super fund that is managed by its members. It provides more flexibility and control over your retirement savings compared to the public APRA super funds. SMSFs can invest in a wide range of assets, including property, shares, and managed funds. This makes them a popular choice for those who want to take a more active role in managing their retirement savings and buy property direct.

Estate planning and SMSF provide benefits for estate planning that should not be overlooked. Unlike other super funds, SMSF members have more control over how their assets are distributed after their passing. With an SMSF, you can nominate who receives your benefits and how they are distributed. This means your assets can be distributed according to your wishes, which can provide peace of mind for you.

SMSF vs. other estate planning options

An SMSF forms part of a structure to manage your estate planning wishes. This, combined with your wills, a family trust and other measures, ensure the correct outcome.

SMSFs also provide tax benefits for estate planning. For example, assets held in an SMSF are not subject to capital gains tax (CGT) when they are sold after the member’s death. This can provide significant tax savings for your beneficiaries.

Creating an estate plan using SMSF

Creating an estate plan using SMSF involves several steps.

We first must look at the Fund’s assets and the members’ wishes. Look at the age and composition of your SMSF . Are there others in the Fund that may continue after your death?


Those in pension mode may choose to allow the Death Benefits to be rolled over to a remaining dependent in the fund via the use of a reversionary pension. The advantage to this is that the benefit does need to come out of Super.


Other members may choose to prepare a binding death benefit nomination (BDBN). This legal document specifies who will receive your benefits and how they will be distributed after your passing.
When creating a BDBN, it’s important to consider the needs of your beneficiaries. For example, you may want to provide for your spouse’s retirement needs or ensure that your children receive an education. You should also consider the tax implications of your estate plan and how they will affect your beneficiaries.
Once you have created a BDBN, you should review it regularly to ensure it still reflects your wishes. You should also keep your beneficiaries informed of your estate plan so they know what to expect after your passing.

Understanding who is a dependent for Superannuation purposes

Under the Superannuation Industry (Supervision) Act 1993 (SIS), benefits may be paid to one or more of the member’s dependants or their legal personal representative (LPR), i.e. the estate, subject to the fund’s governing rules.(check Trust Deed)

A dependant for these purposes (known as an SIS dependant) includes:
• the member’s spouse – legally and de facto
• the member’s child (of any age), and
• someone with whom the member has an interdependency relationship (generally someone with whom the member has a close personal relationship and lives, and where one or each of them provides the other with domestic support and personal care).

A “SIS dependant “also includes someone who is a dependant within the ordinary meaning of that term (an ‘ordinary meaning’ dependant), such as a person who may not be a spouse or child but who depends on the member financially. If an individual is not an SIS dependant, they can only receive a member’s death benefits via the deceased member’s estate.

Common mistakes to avoid in SMSF estate planning

There are several common mistakes to avoid when creating an estate plan using SMSF.

These mistakes include:
• Failing to create a BDBN: Without a BDBN, your benefits may not be distributed according to your wishes.
• Failing to understand who may control your SMSF after your death.
• Failing to have your Trust Deed updated regularly and referring to this in the Estate planning process.
• Best practice is to have a corporate trustee
• Failing to set up the right pension and the conflict between DBBN and reversionary pension.
• Failing to recognize who is dependent vs nondependent.
• Failing to review your estate plan regularly: Your circumstances may change over time, so it’s important to review your estate plan regularly to ensure it still reflects your wishes.
• Failing to keep your beneficiaries informed: Your beneficiaries should be informed of your estate plan, so they know what to expect after your passing.

Choosing the Right Accountant for estate planning

Choosing the right SMSF provider is important for estate planning. You should look for a provider that has experience in estate planning and can provide professional advice.
Our role at Gartly Advisory is to help advise Trustees in the Estate Planning process.
In many cases, we will assist the Trustee in the decision process of whether it is appropriate to wind up the SMSF and to be strategic about their estate planning and smsf.

SMSF estate planning checklist

To help you create an estate plan using SMSF, here’s a checklist of things to consider:
• Create a BDBN and make sure your will works in conjunction with your super strategy
• Review your estate plan regularly.
• Brief your POA and appointer legal representative of your wishes post death as they should be appointed to your SMSF to act post death
• Keep your Deed up to date.• Keep your beneficiaries informed.
• Consider the tax implications of your estate plan
• Choose the right SMSF provider
Estate planning should not be overlooked.

By leveraging the power of SMSF, estate planning can give estate planning control over your retirement savings and can be used to create a tax-efficient estate plan. Peace of mind knowing that your superannuation ends up with the right loved ones is a powerful aspect of having an estate plan.

Is an SMSF setup right for you?

Deciding to implement an SMSF setup is something that needs a plan if undertaken.We are observing that our clients are taking the opportunity to review their Superannuation and retirement goals, The markets are changing, and people are beginning to plan for their retirement strategy.

We are receiving several questions from clients asking whether, given the current market fluctuations of their investment in the superannuation, it is a great time to take charge of your own Superannuation. Some are evaluating if it is a great time to take control by setting up a new Self-Managed Superfund, commonly known as an SMSF.

Investment choices

Clients are considering a range of investments when it comes to their SMSF. These include commercial property, shares, and less conventional investments such as bitcoin as part of their investment strategy. Please do your research for your circumstances and ensure the appropriate Investment Strategy is documented for your Fund.

We can work through with you your strategy to purchase a residential property or commercial property within your SMSF. The key is understanding what restrictions are in place before starting this process.

There are several benefits to being your own Trustee of your SMSF. And hence the ability to run your own Fund. For example, as a Trustee, you can react and manage your superannuation savings. This is because you have greater control and flexibility over your investments. You can take a more hands-on approach to acquire or selling investments within your super fund. This includes responding quickly to opportunities to realign your investment portfolio as the market changes.

But you also need to be aware that being an SMSF comes with the fact that there’s more work for you as a trustee to manage your investments. In doing so, you must ensure you have the expertise and confidence to evaluate your investments. You also need to ensure your SMSF is following its investment strategy. We can certainly assist you here, but you must be prepared to keep records and understand that your SMSF investments are for retirement.

ASIC does not recommend setting up an SMSF with a small balance. Typically a fund should have a combined balance of $200,000 plus to be a viable Fund. You can combine your benefits with other family members, and please discuss with us if this is your option.

Not always easy to be a Trustee

Running an SMSF also takes time and effort. You must ensure that your super fund SMSF is managed properly and that you are achieving returns. As a Trustee, it is also essential to follow the rules there. There are there strict laws within the superfund environment that you, as a trustee, understand. We can help you here to make sure you keep on the right side of the Superannuation laws.

As an SMSF specialist advisor, we can help you to review whether a self-managed super fund is a suitable vehicle for you to establish. We welcome you to make time and discuss your needs in relation to your soft-managed super fund needs and your retirements.

Reach out and contact us:

Our latest PODCAST

For those who may have an SMSF borrowing, our latest podcast may be of interest to you. Join me as we discuss the current landscape for SMSF and borrowing

https://welcome-what-makes-your-business-tick.simplecast.com/episodes/smsf-and-borrowings-the-current-trends-j6judYcO?fbclid=IwAR2E-yPV3fU2Ib-g9gFM7X6LyTslnbAgSQI9orZaIvCNKqx6KWeCNgN8aLE

SMSF Trustee

Acting as an SMSF Trustee and incapacity!

SMSF Trustee role needs to be considered in your Estate planning

Your role as an SMSF Trustee and incapacity are crucial to consider in running an SMSF. Have you thought about what happens when something goes wrong, and you run an SMSF?

Control is one of the main reasons many establish an SMSF. As an SMSF Trustee, you can control your own SMSF. You can control how the Funds investments and the strategy on how and where. What happens if you can’t do it anymore?

What happens if things go wrong?

One day, you may not be able to meet your SMSF Trustee responsibilities. This can happen due to a loss of control or incapacity might be due to an accident, illness or death. But, in most cases, it will unexpectedly leave you with ongoing financial matters for your that need resolving unless you have done some forward planning.

Under the SMSF legislation, a person with a legal disability (including mental incapacity) cannot be a trustee or an SMSF.

Incapacity as an SMSF Trustee

When you are not able to act as a Trustee, someone else must step in on your behalf. They basically act as an SMSF Trustee in your capacity. Your incapacity results in you having to relinquish control of your Trustee role. When appointing someone to act on your behalf make sure the decision is based on Trust. Trust that the person who steps in understands and acts on your wishes and needs.

We also point out that for ease of SMSF Trustee appointment, we recommend that the structure of your SMSF includes a Corporate Trustee rather than individual trustees.

Seek legal help that gets it right!

Your health and financial welfare are paramount for more information read our blog on Estate Planning.

It’s a great reason you need an adequately prepared and executed Will. Have you made an Enduring Power of Attorney( EPOA)? Preparing an EPOA (enduring power of attorney )will assist you in both ensuring someone can step in and continue sorting out your financial affairs. They can then step in and manage your SMSF.

 If you become incapacitated, they will undoubtedly have to set up in your shoes as an SMSF Trustee. Therefore choosing the wrong person or no person can result in your wishes not being adhered to. Or worst still, someone appointed as your replacement  SMSF  Trustee with the wrong intentions.

It’s essential that you choose wisely and that this person is someone you trust and has the financial ability to make the right decisions. Make sure you discuss their role and support this by considering executing Binding Death Nominations in the SMSF.

Reversionary pensions for those in pension mode are a great tool to enable the pension to be transferred to your partner upon death.

Now is the time to Act – not when incapacity strikes

 Implementing tools in the case of incapacity as an SMSF Trustee will also issue some clarity of your estate planning wishes.

Thinking ahead and planning means if and when things don’t go as planned, you have a well-thought-out plan that will ensure your estate and any assets are dealt with your wishes.