How many members smsf

Do you really want to be accountable to your children for your retirement savings? How will you manage conflict from personality clashes or relationship breakdowns? Do you think it will be fun chasing up your least organised child to submit required fund paperwork, every single time? Sadly money can change people and if significant sums are involved, it can lead to inheritance impatience.

Open and communicative families should think carefully before blending their retirement savings. In my opinion, unless you have compelling reasons to include your children, more is not necessarily better for your SMSF.

I advise pre-retirees and retirees on how to manage their family's wealth and to fund their dream retirement. Save my name, email, and website in this browser for the next time I comment. It gets more complex when you add more members to your fund.

There are three main arguments for adding family members or business partners to your fund. Let alone four, five or six Four-member funds represented only 4.

Tim Mackay is principal of Quantum Financial. Share Tweet Share Pin. The trustee structure of the SMSF is important to enable the fund to be administered properly.

The general rule is that all members of an SMSF who have legal capacity must be trustees of the fund or directors if there is a corporate trustee. Voting rights can be important when it gets to decisions about the fund both from the point of view of individual trustees and a corporate trustee. The superannuation legislation requires each member to be a trustee or director; however, it does not stipulate the voting rights of those trustees or how a casting vote operates.

Careful wording of the trust deed can ensure this occurs automatically on death. I think this is so important when it comes to family superannuation funds. To ensure benefits are paid as fund members wish, members may consider providing a reversionary pension to qualifying dependents or make a binding death benefit nomination.

If you are receiving a pension on your death which has a reversion to a survivor, they will continue with the pension until their death or they may have the option to convert it to a lump sum and withdraw the amount from the fund.

Correct legal drafting of these documents will help ensure that the nominations or your instructions are not subject to challenge. Having members of different ages is not an impossible problem to solve as they may all agree on a range of assets that are diversified and take the long-term perspective of the fund into account.

In some situations, if the family is involved in a small business, it is possible to have a business property in the fund which can use superannuation savings effectively by leasing the property back to the family business.

In the long term, if the children continue with the business, they may retain the property in the fund as part of an intergenerational transfer of assets which can be tax-effective.

The day will probably come when the children may wish to move their benefit to another superannuation fund, so they can have their family share in the benefit of a family SMSF. This is something that needs to be planned just like the original decision to have the original family SMSF in the first place. This will require decisions concerning the change in trustee or directors of the fund, reviewing investments and investment strategies as well as transferring benefits to the new fund.

It is worthwhile seeking advice to ensure this happens as smoothly as possible. So, there are some things to think about for those thinking about having a family SMSF. Good planning and understanding the reasons for having the fund are essential to avoid any potential mess that may prove impossible, or extremely difficult and costly, to fix. Irrespective of the maximum members for a small fund, the main question to consider is how many members is a good idea in the circumstances.

This can be a legally appointed representative, a parent or a guardian. If the legally disabled member is represented by a corporate trustee, the company must be directed by the legally appointed representative, the parent or the guardian. If a corporate trustee is appointed, it is the members that establish the SMSF, but it is possible for an entity to establish it too as long as the entity is not the corporate trustee. Please enable JavaScript in your browser.

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