We have written many articles and presented several sessions at our client seminars on these issues over the last few years to demonstrate the complexity involved with getting older, incapacity and death of members in an SMSF.
A case in the Supreme Court of Queensland last year (Narumon Pty Ltd as trustee for John Giles Superannuation Fund) highlighted many of the aspects that trustees and their families need to address.
Without going into detail the case investigated the following issues:
Typical issues with blended families (not necessarily in the Narumon case) often result in the surviving controller of the SMSF (usually the current spouse) possibly having to direct assets of the deceased to:
It is always a higher risk in these instances of the surviving controller of the SMSF not complying with their trustee obligations. Instead they may divert the assets of the deceased member for the benefit of themselves or their own family.
There have been several cases where this has occurred and unfortunately by the time these cases are resolved either the initial funds are unrecoverable (been spent) or legal fees over 2 or 3 years have eroded a substantial portion of the SMSF member balance.
If you need to know more, you need to visit the SMSF specialist team at Green Taylor Partners.