In late 2018, we shared an article that listed several things that SMSF trustees need to consider before the loss of capacity of a member. If you didn’t get a chance to read the article, we have attached the link here. While the article highlighted several important things to consider, we are focusing this month’s blog on whether your fund needs a change to a company trustee.
With a SMSF, all members are either directors of a company trustee or individual trustees of the fund. In the event of loss of capacity, and death of a member, the member’s Legal Personal Representative (LPR) will take over this position on their behalf. The majority of SMSFs have been set up with individual trustees. Although this may save you money in the short-term (ie, save of company setup and ongoing company costs), a little forward planning now, can save your LPR and fellow trustees future costs, time and stress.
When the trustee of a SMSF changes, all the assets of the fund need to be changed to reflect the change of trustee. For a company trustee, this is as simple as completing a form to advise ASIC of the change of directorship. However, with individual trustees, the process can be quite onerous (especially where there are large share portfolios or a number of properties in the fund) and could occur more than once if a change to a company trustee is not made.
Given the onerous nature of the change of trustee process, changing to a company trustee now can reduce stress in the future, especially during a difficult time for your family members.
At Heath Accounting Solutions, we can talk you through all the pros and cons of a company trustee to see if it is worthwhile for you. If you would like to find out more, give us a call on 0438 018 348 to book your cost-free meeting.
General Advice Warning – The information in this article is educational and general in nature. It does not take into consideration your personal financial or taxation information, goals and objectives. Please ensure you seek appropriate financial and taxation advice.
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