A helping hand

PEOPLE setting up DIY super funds need to plan 30 or more years ahead to ensure the fund can deal with their changing lives, according to Perpetual Private Clients’ Steve Davis.

He believes that the advantages of appointing an approved trustee to administer a DIY fund becomes apparent when people focus on events like death or divorce.

“In a typical self-managed super fund, there is a husband and wife who are the members and trustees of the fund,” Mr Davis said.

“That is fine when their relation-ship is going well. But what many people do not realise is that trustees of a fund must be in agreement in order to implement any actions.

“When couples are separating or divorcing, they are not always prepared to reach agreement. This can mean that a fund may effectively be frozen for extended periods of time.”

Having the fund administered by an approved trustee, such as Perpetual or Tower Trust, would ameliorate these difficulties.

Mr Davis said having an approved trustee also made it easier to deal with issues surrounding the death of a member /trustee.

For instance, this would remove the need for a deceased member’s spouse, who is also a trustee, to make decisions about the treat-ment of death benefits.

Similarly, an approved trustee ensures continuity in the running of a fund if a member/trustee loses capacity and is therefore un-able to manage their financial affairs for the rest of their lives.

These potential benefits are additional to the legal protection afforded by having an approved trustee. The trustee company assumes full responsibility for the administration and compliance of the fund.

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