SMSF trustees living overseas cannot override an enduring power of attorney (EPOA) they have put in place to act on their behalf despite them both having oversight of the fund.
BT technical services technical consultant Tim Howard said that while trustees who are living overseas can make contact with those managing their fund within Australia, they cannot force them to take action or override any action that has taken place.
“We have been asked that given the ability to converse and act from wherever we are in the world nowadays, what is the intent of the legislation that prevents someone from acting appropriately from overseas?” Howard said during a recent webinar.
“This scenario is because there is likely to be a resident director or trustee and someone with an EPOA acting in their capacity on behalf of those overseas, and what is to stop the latter telling the attorney what to do?
“There is nothing to stop you beyond the fact that it’s the responsibility of the attorney to act independently and make the decisions not based on any direction, and the onus is on them in their capacity as a replacement trustee or director under the EPOA.”
He said where an EPOA is in place and a person steps into the role of alternative director or director of a corporate trustee, or an individual trustee of an SMSF, they take on specific responsibilities as well.
“It is their responsibility as an individual to make sure they follow rules and do the right thing and not take instructions from trustees who are unable to act while they are overseas,” he said.
“So, the responsibility on the trustees who are here to act the right way really overrides the fact that we have global communications.”
During the same presentation, Howard also noted that trustees can delegate duties under trust laws to meet the central management and control test without having to use an EPOA.