A Will Lawyer’s answer to questions on who should be trustee of your SMSF
Can SMSF members be trustees as individuals – are there problems with having individuals as trustees?
A Will lawyer will advise it is quite okay to have individual members as trustees of self-managed superannuation funds. However, there is a danger that record keeping can become muddled and personal assets can be mixed with those of a fund. There can also be a big administrative burden in transferring title of fund assets from one trustee to another, as opposed to companies having the advantage of perpetual existence.
Trustee companies whose sole role is to be trustee of a super fund also attract a lesser annual ASIC fee, so the cost is not great.
SMSF – is it okay to use any company as trustee
A Will Lawyer will advise it is best if a trustee of an SMSF is incorporated specifically for the purpose of being trustee of the SMSF.
A company which trades in its own right might be sued in connection with its other trading activities and it may become necessary to change the trustee in the future. Changing details of asset ownership (especially real estate and shares) can be time consuming and costly.
It is also common for trading companies to grant security over their assets in connection with their loans, and some loan documents provide the security attaches not only to assets the company holds in its own right but also assets the company holds as trustee. If that occurred, the fund would be in breach of the SIS Act and the consequences will be serious.
Even a company that has ceased trading is less than ideal – the Company could still be sued in the future for anything that occurred while it was trading.
If you wish to obtain further information please contact one of the lawyers in our Will Lawyer team at Matthews Folbigg on 9635 7966