Succession Planning

Replacement trustees will need director ID

director identification SMSF

Corporate SMSF trustees intending to use an enduring power of attorney in the future need to ensure that person also has a director identification number to take on the role.

Trustees of a corporate SMSF that are interested in organising an enduring power of attorney for a member who has lost capacity or is overseas have been advised to ensure they set up a director identification number for the replacement trustee.

BT Academy head of financial literacy and advocacy Bryan Ashenden said financial planners need to ensure their clients in a corporate SMSF have appropriately planned for the ongoing operation of the fund, including those who may act on behalf of a trustee.

“The first step will be deciding the people that need to get the director identification number and then we can establish the corporate SMSF trustee,” Ashenden said during a technical briefing today.

“From 5 April 2022, if a financial adviser makes a recommendation to a client to set up an SMSF, then part of that process is to recommend having a corporate trustee.

“Think about the ongoing operation of the fund. If you have clients that are going overseas for a period of time and they have a SMSF, they might want to appoint somebody as a power of attorney to make decisions on their behalf while they are overseas.

“If they have got the corporate trustee in place, the attorney will essentially need to have a director identification number to fulfil those responsibilities.”

In the event a member dies, he noted trustees will also need to ensure any legal personal representative acting for the deceased member has a director identification number, otherwise they cannot make decisions on behalf of the deceased.

“Part of that process is the legal personal representative actually needs to be appointed as a trustee of the fund. If it’s a corporate trustee, that person would need to be appointed as a director of the corporate trustee and now needs to have that director identification number,” he said.

“If this takes place after 5 April next year, they will need to have that director identification number before they can actually be appointed.”

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