One of the greatest aspects of an SMSF is the level of control you have in tailoring your Fund to meet your own retirement interests. The Members have the sole control and decide how the Fund will operate and what investments the Fund will invest in.
The significant question that comes up after deciding that an SMSF is right for you is choosing the Trustee – is an Individual or Corporate Trustee structure right for your SMSF.
An SMSF is a type of Trust similar to a Family Trust. As such the Trustee can be an Individual Trustee or a Company Trustee.
A Fund cannot have a sole individual as a Trustee. There must be more than one person as a Trustee if the Individual option is chosen. Therefore, you have a choice as to who becomes a Trustee of the Fund. This may include your partner, members of your family, a business partner, friends or generally anyone 18 years or over and not under a legal disability unless they are disqualified persons. The Trustees may act as Members of the Fund as well which would give them the opportunity to consolidate their super balances into the SMSF.
The term “settlor” refers to the person who establishes a Trust. In an SMSF, the settlor is the Trustee.
An SMSF can have up to four Individual Members, each of whom must be a Trustee of the Fund.
It is important to have a Second Trustee if it is a Single Member SMSF. You need to plan for what happens if you lose legal capacity, leave the country or die. To overcome this, you can simply appoint a Second Trustee given the following conditions:
Alternatively, you can also set up a Corporate Trustee. See Icon below.
You can also set up a Corporate Trustee for your SMSF if all of the following apply:
This type of Company is known as a ‘Special Purpose Company’ because its only purpose is to act as a Trustee of an SMSF. For more information on Corporate Trustee see here.
It is crucial that all Trustees have a thorough background knowledge of how an SMSF regulates and their duties. Trustees need to abide the rules and regulations when managing an SMSF. Some of these include the following:
For more guidance on the roles and responsibilities of a Member and Trustee, please our page on SMSF guidance.
We are Melbourne based with clients throughout Australia. Our SMSF administration service is mostly paperless. This enable us to charge a fair fee, resulting in a good value-proposition for you.
Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.
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