SMSF Trustees – Corporate or Individual?
Deciding whether to have a special purpose company or individuals as trustees for your Self Managed Super Fund is an important decision. For many reasons, we recommend a Corporate Trustee over Individual Trustees.
- In an SMSF with only one member, the individual must invite another person to provide assistance with the trusteeship. Having a Corporate trustee will allow your fund to have just one member and a sole director, eliminating the need for a second person to be involved.
- A company ‘lives on.’ This means a company will not ‘die’ making a Corporate Trustee superior by being able to control a SMSF more certainly in the even of death or incapacity of a member.
- Increased asset protection can be gained by having a Corporate Trustee, as companies are subject to limited liability if a party sues the trustee for damages.
- Estate planning is much more flexible with a Corporate Trustee in place. The trustee does not change as a result of a member’s death. As an Individual, the death of a member requires there to be a change of trustee which can create extensive administration work and costs.
- Ease of administration is another advantage of a Corporate Trustee over an Individual Trustee. When members are admitted to, or cease membership of the SMSF, title of all assets of the SMSF remains in the name of the Corporate Trustee.
- An SMSF with a Corporate Trustee can pay benefits either as pensions or as lump sums. As an Individual Trustee, the member must surrender their pension entitlement if they wish to obtain a lump sum.
If you are considering a change to your SMSF Trustee, please contact our The Money Edge on 4151 8898. If you would like more information on Self Managed Super Funds, you can download a copy of our Guide to Running an SMSF.
The Money Edge | Bundaberg