Monday, October 21, 2013
Piper Alderman recently published an article entitled, Succession Planning For SMSFs and the Role of a Corporate Trustee, Wills Watch (October 2013). Provided below is an excerpt of the introduction:
Self Managed Superannuation Funds (SMSFs) are increasingly popular and often hold significant wealth. In some instances the assets held in member’s SMSFs are more valuable than their own homes. The need for proper succession planning for when a member of a SMSF dies is therefore vitally important.
There are a number of factors to consider when dealing with succession planning of a SMSF.
Choice of Trustee:
The Superannuation (Industry Supervision) Act 1993 (SIS Act) governs who can be a trustee of a SMSF and whom can be appointed. Subject to the provisions of the SIS Act a SMSF can have individual trustees or a corporate trustee.
Where individual trustees are appointed, individuals must also be a member of the fund. If the SMSF is a single member fund however, as the member is not “perpetual” there must be two individual trustees at all times, one being the member of the fund.
One effective tool to assist with the succession planning of a SMSF is to appoint a corporate trustee rather than individual trustees. In most cases a corporate trustee can provide greater flexibility for succession planning.