An SMSF specialist has highlighted the potential extra work trustees may need to undertake to deal with the relationship breakdown of an adult child who has been added to a fund, raising questions about their inclusion.
BDO Adelaide senior consultant Peter Crump said a relationship breakdown between an adult child member of an SMSF and their partner outside the fund may lead to actions not required if both were members of an Australian Prudential Regulation Authority-regulated fund.
Speaking at the SMSF Association Technical Summit 2026 in Sydney last week, Crump noted a key issue was the quantification of the benefits each person in the breakdown held and for SMSFs the only date where a benefit entitlement was exactly known was 30 June.
“That date is the only time of the year when we know what a member’s benefits are, but when do we know what that entitlement is? We don’t know until about September or October, or May, June of the following year,” he said.
“With a family law superannuation discussion, when they’re dealing with retail public offer funds, they know exactly what the benefit is today. They want similar information from the SMSF.
“When you’ve got cash and listed shares, life is easy, but when you have a large investment in the fund, like a business real property or unlisted investment, you then need to say what is the market value as at today.
“The trustee then, if they want to assist the member in the family law process, needs to get a valuation of that investment.
“If it’s property, that’s not so hard, but if it’s units in an unlisted unit trust, those are amenable to provide 30 June valuations.
“They’re not going to be amenable to one SMSF asking: ‘Can we have a valuation, please?’ and are more likely to say ‘use last year or wait’.
“So you start to get some difficulties in trying to help the child in your fund resolve their family law issue as you have to engage in further activity to resolve their balance issues.”
He added that as someone who helps SMSFs quantify benefits, he would ask for financial statements as benefit statements may not detail reserves or tax provisions related to an asset sale and other members may not wish to have those details made public to a third-party family lawyer.
“You will have to redact those financial statements to remove information relevant to those people, but not so much that you remove useful information in the high-level financial statements,” he said.
“We’re starting to get fairly complicated here, so I’m not saying don’t bring children into your funds, but if you’ve got one, make sure their relationship is likely to last. If you don’t, your life is going to be very challenging.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason