When setting up a self-managed super fund (SMSF), one of the most important decisions you’ll make is whether to appoint individual trustees or a corporate trustee. While both structures are allowed under superannuation law, at Audit your Superfund we suggest you consider using a corporate trustee – and here’s why.
Less hassle when trustees change
One of the biggest downsides of individual trustees is the amount of paperwork involved when there’s a change in the trustee structure. Whether a member joins or leaves the fund, or passes away, you’re required to update the ownership of every fund asset – including property titles, bank accounts and share registries – to reflect the new trustee structure. This can be time-consuming, costly, and in some cases, legally complex.
With a corporate trustee, the company remains the legal owner of the fund’s assets, even if directors come and go. This means fewer changes and less administrative burden when the people behind the SMSF change.
Easier fund management over the long term
A corporate trustee structure provides long-term flexibility and consistency, especially as fund members age or circumstances evolve. It also simplifies estate planning and the transition of fund control to the next generation, helping to avoid future disputes.
At Audit your Superfund, we see many instances where an SMSF that started out with individual trustees runs into problems later – often at a time when the surviving trustee is already dealing with grief, illness or other stress. Having a corporate trustee in place can make these moments easier to navigate.
Better compliance and less risk of errors
The ATO takes trustee compliance seriously. Having a corporate trustee reduces the chance of administrative slip-ups and helps ensure your SMSF meets its obligations. Corporate trustees are also easier for auditors and professionals to work with, especially when it comes to documenting decision-making and keeping records up to date.
A small upfront cost for long-term peace of mind
Setting up a corporate trustee involves a slightly higher upfront cost, as you’ll need to register a company. But for most SMSF trustees, this is a small price to pay for the long-term benefits in efficiency, flexibility, and reduced risk.
We suggest the use of corporate trustees as the better long-term option
While individual trustees may seem simpler in the short term, corporate trustees are almost always the better choice when you consider the long-term management of your SMSF.
If you’re thinking of setting up or changing your SMSF, talk to your accountant or financial adviser first – and discuss the trustee structure that’s right for you. If you already have an SMSF in place, we’re here to support your fund through independent, expert audits – contact us if you need assistance.