With the ageing population and issues such as dementia, consideration should be given by members of SMSF to put an enduring power of attorney (financial) in place. If a trustee/member of a SMSF is under a legal disability, a person who holds their enduring power of attorney may take their place as trustee or as a director, in the case of corporate trustees, because the attorney is deemed to be their legal personal representative. In most cases, the trust deed specifically allows the substitution.
WARNING: If there is no person who holds an enduring power of attorney of a trustee/member who suffers a legal disability, the fund will cease to be a SMSF and the Tax Office will become the regulator of the fund until a registrable superannuation entity licensee is appointed as trustee. If the fund loses it’s status as a SMSF because of the lack of a trustee it will be taxed at the highest marginal rate as a non-complying fund.
For further information or assistance please do not hesitate to contact Trevor Kuhle.