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An enduring power of attorney can help your SMSF stay compliant
The SIS Act sets out conditions a fund must satisfy to be an SMSF. A member who has an enduring power of attorney in place ensures:
- the fund can continue to satisfy the definition of an SMSF if they lose capacity; and
- they can choose their most appropriate replacement as trustee or a director of the trustee.
There are some points to note about the power of attorney:
- it must be in force before the member loses capacity;
- it must be current; and
- it must accord with relevant state or territory legislation.
The replacement process is not automatic. The incapacitated member must be removed as trustee and the legal personal representative appointed as trustee or director of the trustee, all in accordance with the relevant legislation and the governing rules of the entity (SMSF trust deed or company constitution).
The legislation provides for a 6 month period to get the fund in order. This means the replacement must be appointed within 6 months of the incapacity, unless the member regains capacity within that period and can resume their duties.
More information from the ATO
For more information, read Self Managed Superannuation Funds Ruling 2010/2.
More Cleardocs information on related topics
You can read earlier ClearLaw articles on a range of SMSF and estate planning topics.
Order Cleardocs estate planning packages
- Enduring Power of Attorney (Personal and/or Financial) VIC
- Enduring Power of Attorney (Medical) VIC
- Appointment of Enduring Guardian NSW
- Power of Attorney (Financial) NSW
- Advance Health Directive (Medical) NSW
- ClearWill Online
- ClearWill with Testamentary Trusts
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Special Counsel
+61 3 9258 3524
paul.ellis@maddocks.com.au
Qualifications: LLB, Deakin University, BA (Political Science), Monash University
Paul is a Special Counsel in Maddocks Government and Not-for-Profit Commercial team. He specialises in:
- the establishment, governance, operations, regulation and administration of charities and other not-for-profit entities,
- in commercial arrangements for the procurement or supply of goods and services, including technology services, and
- in compliance and enforcement activities undertaken by government agencies.
Paul is Maddocks' main authority in relation to the Personal Property Securities Act 2009.
He has an in-depth understanding of the government sector, as his experience prior to Maddocks includes 13 years with the Victorian Department of Justice.
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