Why a Corporate Trustee for SMSFs?
Whilst the regulations allow individual or corporate trustees for Self Managed Superannuation Funds there are several reasons why we lean towards a corporate trustee.
Fund’s assets are required to be held in the name of all trustees. If members are added or names change due to divorce or marriage and there are individual trustees titles of all assets are required to be updated. Even for a fund with only a few assets, say ten shares, two bank accounts and an investment property, the time taken to advise registries, banks and land titles can be time consuming. In contrast where the trustee is a corporation the addition or change in member names requires only the reporting to ASIC and the ATO on the change in details.
Limited liability provided by corporate trustees can add an additional layer of protection on personal assets.
Borrowing within superannuation
An increasing strategy employed by funds, many major lenders insists on a corporate trustee for the SMSF. Whilst this is not a legislative requirement it is worth considering upon establishment should this be a strategy you might utilise in the future.
Whilst there are establishment costs for a corporate trustee and ongoing ASIC costs (lower than the usual annual fee providing the company is set up as a special purpose company) these additional establishment costs should be considered in regards to the possible future costs to update registries etc should there be a change in membership.