Super Fund sacks its Company as Trustee

Question:
My new client has a company as a trustee of his Self Managed Super Fund. I don't like the ASIC fees. And he doesn't want to pay my accounting fees to do the work on his company. Can he get rid of the company as trustee and replace it with himself and his wife at this late stage?

Answer: A company as a trustee of your Super Fund is not all bad. A company as trustee helps if you change members often; you then only need to change the directors. You can also get a reduction on the ASIC fees; provided you only use the company as the trustee.

However, it is becoming unfashionable to have a company as trustee of your SMSF. Most people are just using their members as trustees. Some argue that a company as trustee adds another unnecessary degree of complexity.

What are the formalities to doing this I hear you ask?

For starters, ensure that your client understands the costs and benefits of having individuals as trustees as opposed to the company as trustee -- there are advantages and disadvantages to both types of trustees.

Secondly, your client must document the change in trustee (this is a requirement of the law). Build the SMSF Update Trustees and Members deed at http://www.lawcentral.com.au/CreateDoc/createlink.asp?docId=220&SessionID....

The SMSF Update Trustees and Members Deed http://www.lawcentral.com.au/CreateDoc/createlink.asp?docId=220&SessionID... allows your client to not only get rid of the Corporate Trustee but also document any changes in membership to his Self Managed Super Fund at the same time.

Our Update Deed follows "Best Practice". It costs $99 and takes 7-11 minutes to build.

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