The million dollar question
One of the many decisions with establishing your SMSF initially is to decide on the appropriate trustee structure. Two choices are, using a corporate trustee or using individual trustees. Both of which have unique benefits and attributes associated that should be considered carefully for the initial establishment and in the future as your fund evolves.
The differences
Selecting individual trustees for an SMSF is very quick, it removes a lot of the complexity behind the structure of your overall SMSF framework and there are also no costs associated with creating a corporate trustee (a Proprietary Limited company with directors). This is very useful in the case of a husband and wife that require the added control and flexibility to their superannuation but do not require added costs or complexity.
On the other hand there is the use of a corporate trustee which may be the more suited choice. A corporate trustee can aid in administration by having a single trustee that can add or remove members of the fund if needed. A corporate trustee can hold investments in the company trustee name as opposed to the names of the individual trustees, making transfers and deceased estates less of a burden.
Rhyme, reason and requirement
As with many aspects of an SMSF there are limitations and requirements involved for trustee fork in the road decision. For instance, if you it will be a single member of the fund or you will want the SMSF to be able to borrow funds in the future. You will need and corporate trustee.
A simple reason to nominate to have a corporate trustee is it offers future flexibility and protection in case something goes wrong, for example a premature death and divorce are common complexities that make having a corporate trustee a better choice.
What to do?
With so many options, and every option has a future impact, getting the decision right is important. You will need a guide! By that I mean a financial planner guide you. Allowing for clean and clear vision for what structure you would need and benefit from. All that’s needed is for you to take the first step and book an appointment with an advisor.
