WHO CAN BE A TRUSTEE OF A SELF-MANAGED SUPERANNUATION FUND?
At the outset it is noted that the succession and appointment of trustees of a Self-Managed Superannuation Fund (SMSF) are governed by the very wording of the trust deed of the SMSF.
The Superannuation Industry (Supervision) Act 1993 (Cth) (SIS), has requirements for the appointment and constitution of trustees, which are typically closely followed by the trust deeds of SMSFs.
Section 17A SIS requires all members of an SMSF to be trustees, or to be directors of the company which is a trustee. The number of members must not be greater than four.
The composition of trustees of a super fund is important as it can impact on how death benefits will be paid to members. Consequently it is fundamental to ensure that the right successive trustees are appointed.
The deed of trust could dictate that a majority of the members are able to appoint an additional trustee.
In the situation where there is a corporate trustee, it is the constitution of the company in question which will govern who has the power to appoint and remove trustees and directors. If this issue is determined in accordance with the relevant shareholdings, it needs to be considered what happens to those shares on death.
WHAT HAPPENS WHEN A MEMBER DIES?
On a member’s death, SIS provides a 6-month window period during which the SMSF must fix the trustee issue to comply with section 17A. It is possible that the legal personal representative (for instance, an executor) can be appointed as trustee of the SMSF (which will be in addition to this 6-month period).