Setting up a SMSF can be daunting, you only have to look at the legislation to see that – over 700 pages (yes, you read that right – 724 pages to be precise) of rules about SMSFs and that doesn’t even include the regulations or other associated legislation.
But don’t be put off. Although, the law governing SMSFs is complex, with some careful planning and support from knowledgeable advisors, you could have a successful SMSF in no time. So what is the key to the success of an SMSF? Well, there is no magic involved; you just need to make sure you get the SMSF set up right from the outset and then reviewing things regularly afterwards. Sadly, you’d be surprised at how many people don’t do this and pay dearly later on. The right set up will help you to avoid the costly and stressful pitfalls of getting it wrong and take you a step ever closer to living your dream retirement.
Important things to consider before setting up an SMSF.
There are many things to consider when setting up a SMSF but here are some of the key issues:
1. Professional help to get it right from the start.
Setting up your SMSF properly in the beginning will reduce the risk of significant cost to you later. For example, having to change a trustee or being penalised for non-compliance.
2. Appointing the right trustees
Appointing the right trustees initially is crucial to the smooth, cost effective running of the SMSF. Whether to appoint an individual trustee or corporate trustee will depend on many factors.
3. Having the best Trust Deed
The SMSF is only as good as its Deed. Having a high quality Deed in place is paramount to the successful running of the SMSF. While the law may make provisions about what trustees can and can’t do, the Deed prescribes what can happen for a particular SMSF. For example, the law may allow non-lapsing death benefit nominations but if the Deed does not, then the Members will not be able to make them.
4. Making sure the SMSF is an Australian Fund
If the SMSF does not meet the residency requirements then it may be found to be non-compliant and will be in danger of significant negative tax consequences.
5. Having an exit plan
Having an exit plan in place which contemplates how you will end your Fund in various situations including simply because you want to, due to death or following a relationship breakdown.
At CRH Law, we are here to help you every step of the way when it comes to your superannuation. From getting things right from the inception of an SMSF to helping you to keep your SMSF running at an optimum, our team is ready to help you to become the master of your own superannuation and retirement.
With a background in aged care management, Rebecca brings hands on experience and insight into our elder law and aged services areas as well as a thorough understanding of complex estate planning issues and disputes.