Self Managed Super (SMSF) – Corporate vs Individual Trustees

Corporate or Individual Trustee – Which one is best for you?

At BND Financial, we generally prefer a Corporate Trustee over Individual Trustees for Self Managed Super Funds (SMSFs), some of these reasons are discussed below:

• Where you have a Sole Member Trustee, and the SMSF is established for that one individual, that sole member needs a third party trustee to be established. That sole member of the SMSF would become reliant on two individual trustees.

• A company has an indefinite life span; in other words, it cannot die. Therefore, a corporate trustee can make control of a SMSF more certain in the circumstances of the death or incapacity of a member.

• An SMSF with a corporate trustee can pay benefits either as pensions or as lump sums. As an Individual Trustee, the member must surrender their pension entitlement if they wish to obtain a lump sum.

• There are Administrative efficiencies, such as when members are admitted to, or cease, membership of the SMSF, title to all the assets of the SMSF remains in the name of the corporate trustee.

• There is Greater asset protection, as companies are subject to limited liability, a corporate trustee will provide greater protection where a party sues the trustee for damages.

• A corporate trustee ensures greater flexibility for estate planning, as the trustee does not change as a result of the death of a member. As an Individual, the death of a member requires there to be a change of trustee, and this gives rise to considerable administrative work and costs at a sensitive and inopportune time.

While it is more expensive to setup a Corporate Trustee the long term benefits often out way the initial cost.

To book a no obligation appointment with our experienced financial planner please call (03) 6344 3899 or send us a message online.

General Advice Warning

The information on this website is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.

Whilst every care has been taken in the preparation of this website, BND Financial Pty Ltd (‘BND Financial Services’), its directors, authors, consultants, editors and any persons involved in the construction of this website, expressly disclaim all and any form of liability to any person in respect of this website and any consequences arising from its use by any person in reliance upon the whole or any part of this website.