Changing SMSF Trustee’s with Cleardocs

Danni Kirwan Marketing Executive

Last year, Cleardocs launched our Change of SMSF Trustee product, enabling our customers to change the trustee(s) of their Self Managed Superannuation Funds (SMSF’s). The Change of Trustee can be used to:

• replace individual trustees with a corporate trustee
• replace a corporate trustee with individual trustees
• remove trustees
• retire trustees
• add trustees

By the way, if you are interested in changing trustees of another type of trust — discretionary (family), unit, or hybrid — then see our earlier blog Careful about changing a Discretionary Trust, Hybrid Trust — even just changing trustee

Why change SMSF Trustee’s?

Many SMSF’s are making the decision to change to a corporate trustee to enable easier administration — particularly, in the circumstances of admitting or removing trustees, or the death of a trustee. Also a corporate trustee can enable a fund to operate with an individual as both the sole member and sole director of the corporate trustee.

In addition to these reasons, the recent popularity of SMSF borrowing has seen an increase in SMSF trustees changing from individuals to corporations – at the request of some of the banks.

If you’re changing from individuals to a corporate trustee, then you’ll need to have registered a company first as the ACN number is required to complete the Change of Trustee documents. You can register a special purpose company with Cleardocs for $537.50.

Although changing from individual to corporate trustees is popular, many SMSF’s also have reason to add or remove individual trustees. SMSF’s can operate for decades, so it’s reasonable to expect some changes to occur within that time that may affect the trustee(s) of the fund. Some basic examples include removing a trustee in the case of a marriage breakdown, or adding a trustee when parents add their children to their fund.

Get advice first

Regardless of the reason for the change, it is important:

· to get professional advice about your situation before deciding what to do; and

· to record any change of trustee(s) appropriately so that the SMSF’s documents accurately reflects the current situation of the SMSF.

Removing a trustee? Not without their signature...

Although the Change of SMSF Trustee documents can be used to remove or retire trustees, it is important to note that the documents require the signature of the outgoing trustee – so the documents cannot be used:

· to remove a trustee without their participation; or

· to remove a trustee who has died — in the case of a deceased trustee, we can refer you to our legal helpline at Maddocks for the appropriate documents.

Using the Cleardocs Change of SMSF Trustee

In order to remove a trustee, the SMSF must first have a Cleardocs deed. If the SMSF doesn’t currently have a Cleardocs deed, then you can update to a Cleardocs SMSF deed for $99. This ensures that our Change of Trustee documents are suitable to use with the SMSF deed.

To find out more about our Change of SMSF Trustee package, click here to go to the product page.