SMSF advisers and trustees should not make the mistake of viewing someone acting under an enduring power of attorney (EPOA) as doing so on behalf of another person, but instead regard them as acting as an actual trustee of the fund, an SMSF technical expert has pointed out.
The Auditors Institute ambassador Graeme Colley said it was a misunderstanding that an attorney appointed as a trustee or director of a corporate trustee in the case of incapacity acted for another person and any documentation signed in that way was incorrect.
“The attorney may sign documents in relation to the fund after a trustee or director becomes incapacitated and the person holding the EPOA may put down they are acting on behalf of the member or the director or the trustee when they sign their name under the EPOA,” Colley said during a webinar today.
“The fact is that is not the way to sign documents in relation to an incapacitated person who was a trustee or director of a fund because the attorney takes on the personal liability of the individual.
“They become the trustee of the superannuation fund and the other person ceases to be a trustee or a director of the corporate trustee.
“Looking at those documents again, they’re probably incorrectly signed from what I understand because the attorney under the EPOA will become the trustee or the director and signs as a trustee or director in those circumstances.”
He said the duties of an attorney were outlined in section 17A of the Superannuation Industry (Supervision) Act, which states an EPOA is effective for SMSF members, trustees and corporate trustees and in each case the attorney acts for that person.
“This section gives us the ability to appoint a legal personal representative or appoint an EPOA to look after the individual and take their place as trustee of the superannuation fund, which means the SMSF will still be a valid fund because of those appointments,” he said.