A specialist superannuation lawyer has confirmed SMSF trustees can use an appropriate court as a source of assistance if they are unsure as to the binding nature of any obligations they may have when faced with the payment of death benefits.
“If you’re ever in doubt [as to how to properly pay SMSF death benefits] please talk to your legal representatives and if they are in doubt or unsure [about what to do] you can get guidance from the court. [An SMSF is] a trust and judges have the ability to guide you in relation to a trust and how it should operate,” Shane Ellis Lawyers founder Shane Ellis told delegates at the Australian Shareholders’ Association Qld Investor Summit held on the Gold Coast last week.
He stipulated to the audience that in their capacity as SMSF trustees they must be seen to be doing the right thing, being impartial, and taking everyone involved into consideration.
Further he pointed out this requirement has been reinforced by many of the decisions the courts have made recently with regard to the payment of SMSF benefits.
To this end he identified one key component to which trustees must pay attention in demonstrating they have gone about the process in the correct manner.
“Your documentation is paramount. It’s what guides the circumstances but from there it may still mean you need to make an inquiry [into the situation of the parties involved and finding out] how the blended family kids are going, what their financial circumstances are, and be seen to be doing the right thing,” he suggested.
“And if there’s any doubt ask the court [for its guidance]. It’s a hell of a lot cheaper than paying a huge chunk [of money] out of your own back pocket,” Ellis concluded.
