A sector specialist has suggested the magnitude of SMSF member disputes can be lessened if there is a fund mandate for all actions to be passed by resolution.
Accurium head of SMSF education Mark Ellem made this recommendation due to the fact resolutions must be signed off by all trustees and directors of a corporate trustee.
“Prior to [the time when] the dispute rears its ugly head, [during] all of those years when [everyone is] happy, putting in a strategy or process where a decision or decisions made are by resolution so we’ve got everyone’s signature on it is at least from one aspect limiting a dispute from arising,” Ellem told practitioners during a technical webinar held recently.
“That’s because [you can say:] ‘Well hang on, you’ve all agreed, your signatures are on these resolutions.’
“My preference, as an accountant, is I want everyone signing [off] until we get to that point where we’ve got a dispute and [the trustee or director] says ‘I’m not signing’.
“Then I’m going to call a meeting.”
Business Depot director Neal Dallas supported the idea member disputes can be mitigated through using resolutions as standard practice for an SMSF.
“It’s going to be much easier to put forward the case when you’ve got a consistency with your administration, you’ve got consistency with always doing everything by resolution, everyone signs [off] and everyone’s got the benefit of having seen the resolution, whether they’ve read it or not,” Dallas said.
“It’s [then] very difficult for anyone to go back and say ‘I didn’t know what was happening’. Everyone’s signature is on [the resolution], you’ve signed it and dated it and you’ve agreed to that.
“If [you’re] having meetings and people aren’t turning up and the chair has just signed it because [he was told to], that’s going to be much easier to pull apart.”
