A superannuation legal specialist has warned practitioners to address conflict in relation to the roles they will take on upon the death of an SMSF member while the individual in question is still alive.
“All the law has now finally been formally built around this and this area of conflict is huge for you in so many different ways. It’s [about] you in terms of receiving fees, it’s [about] you as being an executor [and] it’s [about] you in taking the role as director of a super fund trustee,” Peter Bobbin Lawyers consultant lawyer Peter Bobbin told attendees at The Auditors Institute Auditors Day in Melbourne last week.
Bobbin pointed out there is now a solution accountants and advisers can use that has become accepted practice in legal circles.
“What I say is when you’re going to visit the client on their deathbed, have in your little briefcase a conflict release and self-benefit authority deed. In the wills that I do, [this is] standard stuff now,” he noted.
Further, he explained how the document could be put into action.
“If we appoint the spouse as an executor and they are going to take control, particularly of the SMSF, but this applies to all super funds in the country … I make the statement: ‘As an executor I release my wife from any conflict, of any action taken by her in connection with my superannuation though she is at the same time an executor of my estate and I authorise her to claim a benefit though she also has the duty of acting as the executor of my estate,’” he said.
“[The statement] should also go into the power of attorney. If it’s not there, then there is no release.”
He emphasised the conflict release should specifically authorise a practitioner to be paid in the event they take on an executor role or accept a power-of-attorney appointment.
In addition, he warned many accountants and advisers will find themselves in situations where these responsibilities will be thrust upon them inadvertently.
“I can guarantee you you’ll be written in dozens of wills that say: ‘My husband Jim will be the executor, but in the event of his death I appoint my accountant,’” he cautioned.
