Self-managed super fund (SMSF) trustees who are solely responsible for the day-to-day running of their fund should be mindful of the effects of ageing and diminished capacity, according to Andrew Proebstl, chief executive officer of legalsuper.
"At legalsuper, we have quite a few members who maintain SMSFs in addition to the balance they hold with us, but I think this is one of those sleeper issues that's only now starting to get some airplay," he said.
"So the issue is that it's often the husband who sets up the funds and who actually takes responsibility for the majority of its operation.
"And then there are two scenarios that can unfold," Proebstl continued.
"The first is where they unfortunately decease prior to their wife or partner, and then they leave the complexity of the self-managed fund for the partner or spouse to deal with.
"And it just leaves an added issue or stress, I guess, that the partner or spouse needs to work through at a pretty difficult time."
However the second scenario, according to Proebstl, is perhaps far more inevitable.
"So the other point being made is that when people who are invested in self-managed super funds become quite aged, the trusteeship of an SMSF may no longer be appropriate," he said.
"The question is how do they transition from being an active investor to being a less active investor due to the passage of time and ageing?
"And whichever scenario plays out, it bears thinking about and planning for."
Originally published by SMSF Essentials.
