In Australia, around 77% of SMSF’s currently have individual trustees.
However, the case for using a corporate trustee is growing stronger and we are now seeing an annual shift away from individual trustees.
In this issue, we investigate some of the reasons why this is the case:
|Asset Protection||Companies have limited liability giving greater protection against laws suits||If individual trustees suffer a liability, their personal assets are also exposed|
|Succession Planning||Companies provide much more certain control on death or incapacity of a member or company director||If an individual trustee dies, the SMSF must change the title on all assets held|
|Membership Changes||The title to all assets remains in the Company’s name thus company trustees see considerably less paperwork and cost upon cessation of membership or changes to the directorship of the trustee company||If a member joins or leaves a fund, that person must become, or cease to be, an individual Trustee
As trust assets must be held in all Trustees names, the title to all assets must be transferred to the new Trustee or Trustees
|Estate Planning||Companies offers greater flexibility for estate planning as the trustee does not change as a result of the death of a member||A member’s death gives rise to considerable administrative work and costs|
|Sole Member Funds||SMSF’s can have one individual as both the sole member and sole director||Sole member SMSF’s must still have two individual Trustees|
Our experienced Accounting team is here to guide your through every aspect of SMSF’s – just call us on 07 3883 8999