Having an SMSF trustee put an enduring power of attorney (EPOA) in place to satisfy the central management and control obligation when they are located overseas may not be the optimal solution for the situation, a technical specialist has said.
“I’m all for supporting trustees working through that process of appointing an EPOA, but that attorney really does have to understand that they are taking on the full-throng approach to trusteeship and they’re not just acting under an attorney, they’re actually taking over a position,” SuperGuardian education manager Tim Miller told attendees during a recent technical webinar.
“You’ve then got someone, who albeit may not be a family member [and] may be somebody else, acting on your behalf and so then you’ve got to [consider if] getting a professional to do this [would be a better option].”
To this end, Miller suggested another solution is available but is not often considered and that is to convert the SMSF into a small Australian Prudential Regulation Authority (APRA) fund, which would see a professional trustee run the fund, but would still grant members a degree of control over it.
Further, he pointed out the use of a small APRA fund is a useful option for addressing many SMSF trustee issues, such as incapacity, but one that still remains largely ignored.
“It’s an under-supported opportunity within our industry and people like myself have probably banged on about small APRA funds [too seldom] because we’re in a space where self-managed super funds are such a large part of our industry and small APRA funds are such a small part, whereas I suspect the balance [between] the two should at least be [more equitable] or the gap should narrow,” he said.
“[That’s] because there are a lot of people in self-managed super funds that would probably be better off with a professional trustee managing their investments and their responsibilities.”