Tag Archives: SMSF

Dealing with a Change of SMSF Trustee

There may be certain circumstances whereby you need to change the trustee of your SMSF and winding up the SMSF may be a costly exercise and best to keep it running. This could be due to a loss of mental capacity of one of the trustees, a trustee has passed away, you travel overseas or as simple as losing interest in running your fund.

The replacement of the Trustee, like all other dealings with an SMSF, are governed by the fund’s Trust Deed, and the need to operate within the laws outlined in the Superannuation Industry (Supervision) Act (SIS Act). Under the SIS Act, all members must be trustees, either as an individual trustee or director of a corporate trustee. It must be noted that under an individual trustee structure, you must have at least two individual trustees at one time, an SMSF can’t operate with a sole individual trustee, but it can operate with a sole director of a corporate trustee.

Loss of Capacity:
If a member of the SMSF loses capacity they are then unable to be an SMSF Trustee. In this case, it is possible for them to be replaced by their legal personal representative or someone who has been granted an enduring Power of Attorney. It is paramount that all members and Trustees of an SMSF have an appropriate Power of Attorney in place to ensure that in the event of loss of capacity, someone will be able to step into their shoes and take-over their role as Trustee.

Loss of Interest:
There is the chance that you as trustee may lose interest in your fund, which could be due to age, and winding up the SMSF may be very costly and therefore best to keep going. Again, with an appropriate Power of Attorney in place, someone can step in and take over your role as trustee of the fund.

Going Overseas:
All Super Fund’s must undergo the “residency test”, with one of the tests requiring that important decisions about the fund are to be made in Australia, i.e. the trustees must be in Australia to make the decisions. Generally speaking, temporary absences of up to two years is permissible, with anything longer than this, the trustee may need to be replaced Once you return, you can be reappointed, and the replacement trustee removed. If you permanently move overseas as a trustee you would need to be replaced or have the fund wound up. Once again, having an appropriate Power of Attorney in place can help to solve this issue.

Death of a trustee:
On the death of a trustee/member it is usual practice that the member’s legal personal representative, who may also be the executor of their estate, be appointed in their place but it is not compulsory. In some trust deeds the appointment of the deceased member’s legal personal representative as trustee may be required, prior to making any decisions about payment of a death benefit. The replacement trustee continues to act as trustee until payment of the member’s benefits commence. If you operate an SMSF it is worth considering who you elect as your legal personal representative and/or executor and if you think they’re up to the task of dealing with your SMSF once you pass away.

When running an SMSF it is important that you have a comprehensive and up to date Will and Powers of Attorney to ensure that in the event you can no longer operate your SMSF, someone can step-in and take-over your role. We have seen too many examples where we have had to work quickly to fix issues that may have been avoided should the right measures have already been put in place.

JBS can assist in these matters and help facilitate a review of your Estate Planning needs and also ensure you have the right structure in place for your SMSF.

Structures Matter

We often ask ourselves what we should be investing in. Should we invest in shares? What shares should we buy? Is now a good time to be buying shares? Should I instead look at putting my money into a more defensive asset like a term deposit? Or even look at an investment property.


While all these questions are good, the first question we need to ask ourselves is who should own the investment, in other words what structure should we use?


When purchasing an investment we have a number of options available to us when it comes to ownership. Do we own the asset personally, jointly, within superannuation or another trust structure or even within a company of our own.


The majority of investments that we can choose can be owned by any of these entities. There are some exceptions however this article will not go into specifics. For the most part though, one of the main differences between the different ownership options is the tax treatment.


When you own an asset as an individual, the earnings are attributed to you personally and hence you will need to pay tax at your marginal rate. You will also be eligible for a 50% capital gains discount when you hold assets for longer than 12 months. As you will be paying tax at your marginal rates, owning assets as an individual can be beneficial for someone with a low income and hence low marginal rate but detrimental for someone who is already on a high income and high marginal tax rate.


The tax rules around jointly owned assets are very similar to that of an individual with one main difference. The earnings and hence tax is split between each of the owners. A husband and wife for example can split the earnings 50/50 between the two of them. This comes in handy when both partners are on high incomes for example although other options may be preferable.


A common misconception is that superannuation is an asset in itself. This is not the case, it is simply a structure that owns the investments. The main benefit of superannuation funds is that the tax on the income is charged at 15% and capital gains (if the asset is held for longer than 12 months) are taxed at 10%. Current legislation also states that when the superannuation fund is turned into a pension account the tax on the earnings within that pension account attracts 0% tax. This is clearly the best way to hold assets from a tax perspective however the obvious downside is that you aren’t allowed to access the money/investment until you meet a condition of release. The government has also put a cap on the amount of money that you are able to contribute into superannuation each year and also the amount of money that you can transfer into a pension account. These restrictions have been discussed in detail in previous articles so I will not go into them here.


There are lots of different types of trusts (superannuation being one of them) however here we will cover unit trusts and discretionary trusts in particular.


In the majority of circumstances the trusts themselves do not pay any tax and instead the tax is paid by the beneficiaries as all income is distributed through to the beneficiaries. For a unit trust, the distributions are paid according to the amount of units owned. For example, if a unit trust has 10 units, and person A owns 7 of those units, then person A will receive 70% of the distribution and hence will be required to pay tax on the amount. As the income flows through to an individual in this example, they will receive a 50% capital gains discount for the unit trust holding the asset longer than 12 months. A unit trust may be applicable for someone running a business with other people who are not part of their family with distributions to be allocated according to the % ownership.


A discretionary trust while similar to a unit trust has one distinct advantage. The earnings can be distributed to any beneficiary on a discretionary basis. That is, you can choose how much of the distribution gets paid to each individual beneficiary and this can vary from year to year. You can therefore allocate more income to those on lower tax rates and less or even no income to those on higher tax rates. This is often used for family owned businesses where money is often allocated to children, non-working spouses or even retired parents in order to keep the tax low and is where the name “Family Trust” originated from. This is the most flexible of structures to hold investments in although you need to remember that all earnings need to be distributed to the unit holders and there are costs associated with the setting up and running of the trust.


Companies are similar to Unit Trusts in that the amount of income that is distributed to shareholders is determined by the share of the company that they own. If you own 70% of the company you get 70% of the distributions. However there are some big differences.


The first one is that the company pays tax (ranging from 27.5% – 30% depending on the size of the company). This means that as dividends are distributed to the company owners they receive what is known as franking credits to offset the tax already paid by the company.


The second difference is that unlike a trust, earnings can be kept inside the company structure rather than being paid out to the company owners. This can help build the assets inside the company where the tax rate is only 27.5% compared to the individual where that tax rate may be up to 45%.


The main disadvantage when it comes to companies is that they are regulated by ASIC. Unlike other ownership options, there is some compliance that needs to be adhered to when running a company and hence more fees may be payable and more work is required.


Structuring the investments in the right way to ensure the minimum tax payable is extremely important but tax is only one factor that needs to be taken into account. If you want to know more, not just about investments but about setting up the correct structure for your goals and needs please contact our offices today.

End of Financial Year Tips


The end of the financial year always seems to creep up on us. Understanding what you could do before and after 30 June can provide the icing on the cake for employees, investors and those in small business. When it comes to superannuation, make sure you maximise the tax deduction this year or salary sacrifice the right amount so you get the best possible outcome and don’t end up with tax penalties.

Concessional contributions are most commonly contributions from your employer, however if you receive a bonus or have additional cash flow and your marginal tax rate is more than 15%, salary sacrifice into superannuation can be a strategy to boost your super balance and decrease your tax. To receive the tax benefit in 2016 your fund must receive the contribution prior to 30 June 2016.

The current concessional contributions are:
It is important that you don’t go over your limit.

Claiming a tax deduction for personal superannuation contributions
If you are self-employed, (you earn less than 10% of your income from wages from an employer, fringe benefits and other related payments) you may qualify for a personal tax deduction to superannuation.

If you intend to claim a tax deduction make sure you are eligible to claim a tax deduction – you may want to speak to JBS first to make sure.  You need to notify the fund of the amount you wish to claim as a deduction as soon as possible to ensure you have the relevant acknowledgement form from your super fund before you lodge your tax return.

Salary sacrificed contributions
Foregoing part of your salary in favour of having additional concessional contributions made to super by an employer may deliver tax advantages.

Existing salary sacrifice arrangements should be reviewed on a regular basis, at least annually. Reviewing a salary sacrifice arrangement before the end of the financial year and amending for the following financial year represents good planning and ensures that you do not exceed any caps resulting in additional tax.

Government co-contributions for low income earners
If you earn less than $50,454 a year and make a non-concessional contribution* to superannuation you may be eligible to receive a Government contribution of up to an additional $500. The actual amount, and eligibility for the co-contribution, depends on a number of factors including the proportion of total income derived from employment, taxable income (and lodging a tax return), age and level of contributions.

*Making large non-concessional contributions is a big decision and advice from a financial planner is recommended before any contribution is made. In the recent Budget, a lifetime limit of $500,000 was placed on non-concessional contributions and therefore it is even more important that you seek assistance before making any after-tax contribution to super.

Low Income superannuation contribution
The Government will provide a superannuation contribution of up to $500 equal to 15% of concessional contributions made into superannuation to eliminate tax payable on these funds when deposited into super. If you are earning $37,000 or less and your employer pays superannuation contributions to a complying superannuation fund you may be eligible for this contribution. You do not need to do anything to claim this payment, but rather the ATO will determine your level of contribution and make it directly to your super account once tax returns have been lodged.

Spouse contributions
If your spouse has an income of less than $10,800, you may be entitled to receive a tax offset of up to $540, if you make a non-concessional contribution to their super account. The tax offset reduces if your spouse’s income is between $10,800 and $13,800, when it cuts out. The maximum offset available is 18% of the contribution made, subject to a maximum offset of $540.

Personal and Investment

Claim all work related deductions
The task of compiling all work related deductions can seem all too hard. However, taking the time to understand what work related expenses are potentially deductible can save you considerable cost. Where you do not have the necessary receipts on hand you can still claim up to $300 of work-related expenses provided the claims relate to outgoings you necessarily incurred in your job or business.

Maximise motor vehicle deductions
If you use your car for work-related travel and your kilometres for the year do not exceed 5,000 kms, you can claim a deduction for your car expenses on a cents per kilometre basis. The allowable rate for such claims changes annually. Any such work-related travel claims must be based on reasonable estimates.

If you use your car for significant amounts of work-related travel you may be able to claim a deduction for your total running expenses to the extent you have used it for work. However, such claims are only available where you have the required log book, odometer readings and receipts.

Property deductions
If you have an investment property and some repairs are required, bring forward the works before 30 June. It is important the invoice is paid pre 30 June to be deductible in this financial year.

Improve your tax situation

There are many things to consider when it comes to your taxes. Here, we’ll give you just a few options to consider to improve your tax situation and explain the importance of your getting your taxation documents in order.

Defer or bring forward income for the current financial year
Consider deferring taxable income, until the start of the next financial year. For example, you may want to consider postponing the sale of assets which may incur capital gains tax. However, in some cases it might be advisable to bring forward income to the current financial year, particularly if your projected income in the next financial year is expected to result in you moving into a higher marginal tax bracket.

Pre-pay interest and tax deductible expenses
Pre-paying interest and tax deductible expense may allow the tax deduction to be claimed in the current financial year.

Tax documentation
It’s important that you keep all your tax documents in order. Review receipts, log books and other documentation to ensure that all records required to manage tax affairs are in order. This will help make the end of the financial year process run as smooth as possible.

Review Your Pension Drawings
If you’re drawing an income from an account based pension, also known as an allocated pension, check to ensure that the prescribed minimum level of income has been drawn in the current financial year. Failure to draw the correct minimum level of income may result in unfavourable tax consequences.

Ensure your SMSF is firmly on track

Managing your own superannuation fund gives you the greatest flexibility over exactly how and where your super investments are made. However, it also means that you are solely responsible for complying with super and tax laws. With the end of the financial year looming, now is as good a time as any to make sure your SMSF is on track.

Investment strategy
Each SMSF must have an investment strategy that reflects the high level investment strategy adopted by the trustees of the fund. As part of the investment strategy, trustees are also required to consider insurance for each member of the fund. In addition to formulating and implementing an investment strategy, trustees are also required to regularly review the fund’s investment strategy.

As we approach the end of another financial year, this presents a good opportunity for trustees to review their investment strategy and ensure that it continues to be appropriate for the fund, particularly where members’ circumstances may have changed.

Value assets
It’s a requirement that trustees of a SMSF value their fund’s assets at market value. This does not necessarily involve trustees obtaining formal valuations from a qualified valuer, however valuations must be provided by a person familiar with valuing such assets.

The JBS team are here to help, if you have any questions leading up to the end of financial year please contact us.

To Record or Not to Record

The retention of key documents is an important requirement for the trustees of self-managed super funds. In this day and age, technological advances have seen the ATO update their record-keeping requirements to allow for electronic storage.


What do trustees need to know about record-keeping?
The ATO, on its website, emphasises that it is the responsibility of the trustees to maintain records of documents in such a way that they are accurate and easy to access. This includes all tax documents and records of the super fund, especially minutes of all investment decisions ensuring that all trustees have acknowledged the decision and the reasons of the choice of investment are noted. This specifically ensures that any disputes between trustees over failed investments within the fund, should not occur since trustees cannot claim they were not involved.


What are the benefits of storing SMSF records electronically?
The ATO’s decision to allow the electronic storage of documents was primarily as a way to minimise the cost of running an SMSF, since it can potentially reduce the costs of maintaining the collection of records. Additionally, a well organised collection may help reduce the cost of any audits required.


Data storage. Laptop and file cabinet with ring binders. 3d

What are the negatives of storing SMSF records electronically?
There is a need to ensure that all documents stored electronically can be easily verified for authenticity and are easily accessible. In particular, unknown authenticity of documents held digitally may result in issues when lodging documents with the ATO. Keeping a copy of key documents without the originals may result in difficult questions regarding whether the original was destroyed for the reason other than to simply reduce paperwork. For this reason trustees should strongly consider whether to keep original copies of important documents. The loss of a trust deed, or the existence of one with questionable accuracy, for example, has potentially major implications in case of disputes between trustees, often requiring court decisions for solutions to be achieved.


For how long do documents need to be kept by trustees?
The ATO specifies the need to maintain various documents for various lengths of time.  Should any of these documents not be available within the time period then a penalty must be paid based on penalty points.


Records required to be held for at least five years:

–  Accounting records with the transactions and financial position of the SMSF (If not held, 10 penalty units must be paid)
–  Annual operating statement and an annual statement of the SMSF’s financial position (10 penalty units)
–  Copies of all SMSF annual returns
–  Copies of other statements required to be lodged with the ATO or provided to other super funds


Records required to be held for at least ten years:

–  Minutes of trustee meetings and decisions (10 penalty units)
–  Changes of trustees (10 penalty units)
–  Trustee declarations acknowledging the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007 (10 penalty units)
–  Members’ written consent to be appointed as trustees
–  Copies of all reports given to members (10 penalty units)
–  Documented decisions about storage of collectables and personal-use assets


Ultimately the responsibility of retaining key SMSF records falls onto the trustees.  Should any doubts be predicted to exist over the authenticity of a document then care must be taken if making the decision to store SMSF records electronically.


If you’re receiving full service SMSF administration from JBS, you’ll be happy to note that we do all the recording of documents for you electronically, however we still keep a copy of the original documentation of key documents such as trust deeds, pension documentation and binding death benefit nominations. This allows easy access to documents for members, trustees, auditors, and the ATO. If you are running your own SMSF, make sure you adhere to all document storage requirements or alternatively, contact JBS to discuss how we can help.

SMSF Collectible Assets

1 July 2016 is the date that new rules around holding collectibles in an SMSF come into effect and it has been noted that SMSF trustees should not expect a transition or leniency period. The legislation changes have been in discussion in some form or another for around five years, giving trustees plenty of time to make the relevant changes to their Fund assets.


The new rules relatinSMSF Collectible Assetsg to collectibles and personal use assets, such as artwork, jewellery, vehicles, boats and wine, restrict the storage of these items as well as placing additional requirements on protecting these assets. From July, collectibles cannot be stored in a private residence of a member or a related party. You can continue to store your collectibles in a premises owned by a related party as long as it’s not their private residence and is strictly forbidden to be displayed. You must also keep documented records on the reasoning behind your storage decision.


While we are on related parties, you can only lease collectibles to an unrelated party and the lease must be on arm’s length terms. And should you be selling the asset to a related party, it must be at market rates and have a professional valuation to confirm market price.  To be considered a qualified, independent valuer, they must either hold a formal valuation qualification or be considered to have specific experience or knowledge by their professional community.


All collectibles must also be insured in the name of the Fund within seven (7) days of purchase. Insurance must be maintained on the asset at all times while held by the Fund and cannot form part of another policy; such as a trustees personal home and contents insurance.


If your collectible assets within your SMSF cannot tick off the above, you may wish to consider selling the asset prior to the 1 July 2016 date to ensure that your fund remains compliant. It seems that many trustees have been employing this strategy as collectible assets made up $713 million (0.18%) of all SMSF in June 2011, which is a significant amount more than reported in June 2015, with only $389 million (0.07%) of the massive $590 billion assets held by SMSFs. Many believe the reduction is due to the discussions and subsequent implementation of new legislation resulting from the Cooper Review completed in 2010.


If you have collectibles or personal use assets within your SMSF and are concerned about complying with the new legislation, get in contact with the team at JBS prior to the July 2016 deadline to ensure you take appropriate steps to keep your SMSF compliant.


Maximising Your Super

Superannuation, it’s a bit of mine field when it comes to knowing how to maximise your super contributions. But don’t worry, we’ll break it down for you:

Maximise concessional superannuation contributions

Concessional superannuation contributions for the 2014/15 financial year are limited to $30,000. However, if you were aged 49 or older on 1 July 2014, a transitional limit of $35,000 applies giving you the opportunity to maximise your concessional contributions before the end of the current financial year.

Claiming a tax deduction for personal superannuation contributions

If you’re intending to claim a tax deduction for personal superannuation contributions, a “Notice of Intention to Claim a Tax Deduction” (s.290-170 Notice) must be lodged with your superannuation fund before any one of the following events occurs, whichever is first:

–    lodgement of the income tax return for the financial year in which the tax deduction is being claimed
–    commencing a pension
–    withdrawing superannuation benefits
–    rolling over your superannuation to another superannuation fund

Maximise non-concessional contributions

Non-concessional contributions are personal contributions made from after-tax income. For the 2014/15 financial yMaximising your superear, non-concessional contributions are limited to a maximum of $180,000. If aged 64 or under on 1 July 2014, you’re able to bring forward up to three years’ worth of contributions (up to $540,000) provided you haven’t done this previously.

Making large non-concessional contributions is a big decision and advice from a financial planner is recommended before any contribution is made.

Salary sacrificed contributions

Foregoing part of your salary in favour of having additional concessional contributions made to super by an employer may deliver tax advantages.

Existing salary sacrifice arrangements should be reviewed on a regular basis, at least annually. Reviewing a salary sacrifice arrangement before the end of the financial year and amending for the following financial year represents good planning.

Your superannuation contributions at 65

If you’re aged 65-74, your superannuation fund is only able to accept contributions if you have been gainfully employed or self-employed for a minimum period of 40 hours, worked  over not more than 30 consecutive days, in the financial year in which the contribution is being made.

If you’re approaching 65 and not working, consider making superannuation contributions before your 65th birthday.

Government co-contributions for low income earners

If you earn less than $49,488 a year and make a non-concessional contribution to superannuation you may be eligible to receive a Government contribution of up to an additional $500. The actual amount, and eligibility for the co-contribution, depends on a number of factors including the proportion of total income derived from employment, age and taxable income.

Spouse contributions

Where you make a non-concessional contribution to superannuation for your spouse, you may be entitled to receive a tax offset of up to $540 if your spouse has an income of less than $10,800. The tax offset reduces if your spouse’s income is between $10,800 and $13,800. You will not receive a tax offset if your spouse’s income exceeds $13,800. The maximum offset available is 18% of the contribution made, subject to a maximum offset of $540.

Spouse contribution splitting

Superannuation laws allow for a person to split their concessional contributions with an eligible spouse to build up retirement savings for the other. Up to 85% of concessional contributions made in the 2013/14 financial year may be split with a spouse prior to 1 July 2015. Splitting superannuation contributions allows for couples to balance their superannuation savings between partners.

Life insurance held in super

On 1 July 2014, restrictions came into effect in relation to the types of insurance held through superannuation.

The new restrictions affect insurance policies that provide for the payment for an insured event that is aligned to a superannuation condition of release. In essence, the only new policies that can be taken out through superannuation after 1 July 2014 are those covering the following events:

–    death
–    terminal illness
–    total and permanent incapacity – any occupation
–    temporary incapacity

The new restrictions mean that you will no longer be able to take out a policy with your superannuation fund that covers trauma insurance, total and permanent disablement – any occupation and income protection insurance that provides ancillary (such as rehabilitation) benefits in addition to income replacement. Policies taken out prior to 1 July 2014 will not be affected by these new restrictions.

SMSF Investment Strategy Considerations

For those with a Self-Managed Super Fund (SMSF) you are required to prepare an Investment Strategy, when you initially set up your SMSF and you need to review it on a regular basis, with the industry standard being at least annually.  You may also consider reviewing your investment strategy when there are changes in circumstances, for example a member entering pension phase, or a member making a large contribution into their fund.  The main reason that an SMSF is required to have an investment strategy is to allow for the members personal circumstances to be regularly reviewed as well as, to account for any changes in the markets and economies.

The investment strategy is a way to prompt you as trustees to review your investment portfolio and ensure that it is still current given any changes that may have occurred in your personal circumstances or the markets and economies.  It also helps you review your objectives, strategies and asset allocation to ensure that they’re still current and Considerationsmay even prompt you to make changes where needed.

When drafting an investment strategy there are a few key considerations that you should consider.

Liquidity Needs:

Each member’s personal circumstances and life-stages are an important factor with regards to the SMSF investment strategy.  If each member is 15 years out of retirement, then you may consider investing for growth and riding out any volatility.  However, if one or more members is approaching retirement or is in retirement, then you may need to use a more cautious approach to ensure that you can afford ongoing pension payments, but you may need to adopt some level of risk to help your super benefits last in retirement.

Risk Tolerance:

Each member may or may not have different tolerances to risk.  Some may like or feel comfortable taking on additional risk in the hope of achieving greater returns, however others may feel more comfortable only taking on a small amount of risk and may feel better preserving their capital by investing in mainly cash and fixed interest.  Either way, when reviewing your investment strategy and portfolio for your SMSF, you need to take into account each members risk tolerance.

Asset allocation:

The asset allocation of your SMSF portfolio needs to also be reviewed, especially alongside your risk tolerance, as you don’t want to be too overweight or too underweight in an asset class.  However in some circumstances you may be comfortable with being over or underweight in an asset class.  You may also review your asset allocation based on what’s happening in the markets or economies.  For example, with the cash rate at all time lows, you may wish to seek returns and income from other asset classes, e.g. investing more in shares or international equity.

Insurance Needs of the Members:

As trustees of your SMSF it is now a requirement that you must consider insurance as part of your Investment Strategy.  It is not a requirement for each member to actually hold insurance but it needs to be clearly outlined that insurance has been considered for each member.

Here at JBS we can help you prepare your Investment Strategy and can even help review your current Investment Strategy.


We Have Lift Off – New Website Launch

JBS Financial Strategists is excited to announce the launch of JBS Robson. JBS Robson can provide a whole range of new of services including taxation, accounting, auditing and business solutions. Why would you need to go anywhere else – with JBS Robson working alongside JBS Financial Strategists in the South Melbourne office, we are now your complete ‘one stop shop’ for all your financial requirements.

Michael Robson has over 20 years experience in the finance industry, specialising in construction for the past 7 years. Michael can assist with Business and Individual Income Tax, Goods and Services Tax, Fringe Benefit Tax (FBT) along with many other services.

Below is a short video on services that JBS Robson can assist with:

JBS Robson Play









Want to know more about JBS Robson? Jump on our brand new website, like our Facebook page, follow us on Google + and connect with Michael Robson our Accountant on LinkedIn.

If you have any questions about these new services available please speak to the team at JBS.


Preparing for Loss of Capacity

As we go about our day to day lives we never think about what could happen to us, whether it’s becoming permanently or temporarily disabled, becoming quite ill or even getting into an accident.  For members of a self-managed super fund (SMSF) this could become an issue.  What as members and trustees of your fund can you do to prepare and handle these situations?

The first thing to do regardless of whether you have individual or corporate trustees is for each member to appoint a legal personal representative (LPR) under an enduring power of attorney.  By doing this, if you or another member become disabled and unable to conduct your normal duties as a member / trustee of your SMSF, then your legal representative steps in and takes over for you.  What you should make sure is that you choose the right person to appoint as your legal representative.  As you need to be certain that they understand what it takes to run an SMSF and the duties required of a member / trustee.

What you then need to ensure is that your Trust Deed allows for the legal representative to become a member / trustee of your SMSF.  Not all trust deeds allow for this and you need to make sure yours is flexible enough to allow the appointment of a replacement director or trustee depending on your structure.  If your trust deed doesn’t allow for this then in the event a member becomes disabled then the their super benefits may no longer be able to remain in the SMSF and must be paid out to another fund.

The final thing to do is to assess your trustee structure to ensure it allows for the seamless transition for the legal personal representative (LPR) to replace the disabled member.

The table below outlines the differences between an individual and corporate trustee structure.




Every situation differs and a member becoming disabled doesn’t always occur, thankfully! But by following the tips above you’ll be prepared for the worst case scenario. Our office will be able to assess whether or not you’re ready for this event, so feel free to pick up the phone and give us a call!

Table Source: SMSF Adviser


Adam McKenzie

Once we tick into May I will have been at JBS for 5 years.  My current role is to automate and improve the systems we use on the SMSF side of the business.  We are well underway with the project and are looking to utilise all the technology and software available to ensure the SMSF client experience is unlike any other while encompassing the values of transparency, efficiency and accuracy.

Once the work day ends you can find me on the golf course, boarding the slopes, reading a book or playing my guitar. Some say I also have a mild travel addiction, they are not wrong. In my 24 years on planet earth I have had the pleasure of exploring 25 different countries, all amazing and beautiful in their own right. My goal is to continually stay at least 1 country ahead of my age.  What attracts me to travelling so much is that it opens your eyes beyond any form of written education. It also gives you invaluable perspective and memories that stay with you for life.

Some of the countries I have visited include; Poland, Croatia, India, Switzerland, Belgium, Thailand, UAE, Israel and New Zealand.  I am always planning my next trip as it gives me something to work that extra bit harder towards. South America for the soccer world cup is currently topping my list. Hopefully the Aussies qualify!

Below are a few snaps from my global escapades. From the top left; Paris, Budapest, Agra, Breckenridge, Berlin & Venice.

Adam photos


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