Why You Should Use a Company as the Trustee of Your SMSF
When setting up a Self-Managed Super Fund (SMSF), one of the first decisions you’ll make is whether to have individual trustees or a corporate trustee.
While individual trustees may seem simpler and cheaper upfront, the long-term costs, both financial and emotional, can be far greater.
Here’s why Sharp Accounting strongly recommends a corporate trustee structure for most SMSFs.
The Problem with Individual Trustees
An SMSF with individual trustees must have at least two people listed as trustees. If one member passes away, the fund must appoint a new trustee or restructure the SMSF with a corporate trustee to remain compliant.
This isn’t just paperwork. It means:
- Legally updating the ownership of every fund asset
- Revising banking and investment accounts
- Reprinting trust deeds and trustee declarations
- Liaising with auditors, the ATO, and multiple registries
And all of this has to happen at a time when your family may already be dealing with grief and estate administration.
Why a Corporate Trustee Is a Smarter Long-Term Choice
If your SMSF uses a corporate trustee, the situation is far simpler.
When a member passes away:
- The deceased director is removed from the company
- No changes are required to asset registrations or ownership records
- The SMSF continues without interruption or restructuring
- Control stays exactly where it should with the surviving members or legal representatives
It’s cleaner, faster, and far less stressful for everyone involved.
Protecting Control of the Fund
Estate planning and SMSF control go hand-in-hand.
With a corporate trustee in place:
- You reduce the chance of outside interference or delays
- You maintain continuity in investment strategy and pension payments
- You protect the wishes of the deceased member, especially when a Binding Death Benefit Nomination is in place
- You avoid unintended consequences caused by rushed or forced changes to the trustee structure
While a company structure costs more to set up, it can save thousands and a lot of heartache in the long run.
If your SMSF still uses individual trustees, it’s worth reviewing whether that structure is still right for you. Get in touch if you would like to discuss your SMSF structure.
