Trustee responsibilities of a SMSF
The responsibilities of a trustee for a SMSF are quite detailed. Here we look at what it means to be a trustee and the responsibilities involved.
Trustee and director consent
When you’re setting up a new SMSF you usually appoint trustees or directors under the fund’s trust deed. You need to ensure that the people who become trustees or directors of the SMSF are eligible to be a trustee or director and understand what it means to be a trustee or director.
All trustees and directors must consent in writing to their appointment and sign the Trustee declaration stating they understand their responsibilities. All trustees and directors are bound by the trust deed and are equally responsible if its rules aren’t followed.
It’s also important to remember that to become a director of a corporate trustee, you will need a director identification number. For more information follow this link
Ensure members are eligible to be trustees or directors
All members of the fund must be individual trustees or directors of the corporate trustee, so make sure they're eligible.
Anyone 18 years old or over can be a trustee or director of a super fund so long as they're not under a legal disability. Members under 18 years old can't be a trustee or director. However, a parent, guardian or legal personal representative can be a trustee or director on their behalf.
To knowingly act as a trustee, a trustee director or an office holder of a corporate trustee (such as secretary), while being a disqualified person, is an offence.
You can apply for a waiver of disqualified status if the offence leading to the disqualification was not an offence involving serious dishonest conduct. For more information follow this link
Ensure the company can act as a corporate trustee
A company cannot act as a corporate trustee of a superannuation entity, including an SMSF if certain events occur. Let’s take a look at those events;
The company is aware or has reasonable grounds to suspect that a person who is, or is acting as, a responsible officer of the company is a disqualified person.
An administrator has been appointed in respect of the company.
The company has been deregistered by ASIC.
A receiver, or a receiver and manager, has been appointed in respect of property beneficially owned by the company.
A provisional liquidator or restructuring practitioner in respect of the company has been appointed.
Action has started to wind up the company.
For more information follow this link
What it means to be a trustee or director
Whether you're a trustee or director of a corporate trustee, you are responsible for running the fund and making decisions that affect the retirement interests of each fund member, including yourself.
As a trustee or director, you must;
Act honestly in all matters concerning the fund.
Act in the best interests of all fund members when you make decisions.
Manage the fund separately from your own superannuation affairs.
Know, understand and meet your responsibilities and obligations.
Ensure that the SMSF complies with the laws that apply to it.
All trustees and directors are equally responsible for managing the fund and making decisions. You are responsible for decisions made by other trustees, even if you're not actively involved in making the decision.
As an individual trustee or director of a corporate trustee, you may be personally liable to pay an administrative penalty if certain laws relating to SMSFs are not followed. Follow this link for more information.
Legal personal representatives
It’s important to understand who a legal representative can be and their role. A legal personal representative can be;
The executor of the will or the administrator of the estate of a deceased person.
The trustee of the estate of a person under a legal disability or a minor.
A person who holds enduring power of attorney to act on behalf of another person.
A legal personal representative can act as a trustee or director of a corporate trustee, on behalf of;
A deceased member, until the death benefit becomes payable.
A member under a legal disability.
A minor (a parent or guardian can also act as a trustee on behalf of a minor).
A legal personal representative can't act as a trustee on behalf of a disqualified person.
This link will provide you with more information.
Trustee declaration
The Trustee declaration is signed by trustees and directors of a corporate trustee of an SMSF to declare they understand their obligations and responsibilities.
You must complete this declaration if you become a trustee or the director of a corporate trustee of a new SMSF or of an existing SMSF. More information is in this link
If you would like more information or have questions please contact me paul@congdonfuzi.com.au