North Sydney Commercial Lawyers

Who manages the super when you no longer can?Print This Post

Who manages the super when you no longer can?

Many advisers are unaware that having a Power of Attorney specifically dealing with this issue is part of the armory of a well-advised client.

However, it isn’t as simple as that. The Self Managed Superannuation Fund deed and the Constitution of the corporate trustee (where there is one) should be reviewed to ensure the appointment process for directors is followed and the powers of the legal personal representative are adequately defined in the power of attorney.

SMSFR 2010/2 is the ruling on point and has some good examples of how an attorney can be appointed to keep the fund complying if the member doesn’t want to be (or can no longer be) a trustee.

A related question is what happens when a binding death benefit nomination (BDBN) should be renewed but the member loses capacity. One suggestion is to have the testator sign BDBNs dated at 3 year intervals with instructions to the Attorney to lodge them every 3 years after the old ones lapse.

This would probably work but it assumes that circumstances don’t change. Of course we all know that circumstances can change as time goes by.

An alternative is to have the EPOA (enduring power of attorney) contain a clause expressly permitting it, but the problem is that the definition of “member” in the Superannuation Industry (Supervision) Act 1993 does not include a legal personnel representative for the purpose of signing BDBNs. This view, widely held in the legal fraternity, has not yet been tested.