A superannuation lawyer has suggested serious consideration must be given to the wider implications the involvement of multiple generations as SMSF trustees will have in the event of the fund experiencing compliance issues that could result in disqualification.
Cooper Grace Ward partner Scott Hay-Bartlem said he raises this point as a result of his own practical experience whenever a client approaches him with the idea of including at least one other family generation as trustees of their SMSF.
“One of the interesting things I throw back to is about 10 years ago I had a file where the parents had brought their 21-year-old child [into their fund as a trustee] and he was [a compliance officer],” Hay-Bartlem shared with attendees of the SMSF Association National Conference 2025 recently held in Melbourne.
“Now the parents had some ‘interesting’ transactions in their SMSF and the ATO had come to help.
“We had to do a deal and the ATO was going to disqualify all of the trustees.
“Now the trustees are dad, mum and the son and had the son been disqualified, and he wasn’t involved in the decisions [under regulator scrutiny] that the parents had made, his career would have been completely [ruined].”
According to Hay-Bartlem, this scenario illustrates why potential disqualification is a determining factor as an argument against including multiple family generations as trustees of one SMSF.
“If there is a problem you’re going to get them caught up in the potential disqualification,” he warned.
“So I try and convince clients to have a really good think about [whether they] want to be disqualified because your sibling or your parents did something [questionable] or as a parent [whether] they want their child disqualified [and in turn effectively] ruining their career because [a transaction of the fund] was a bit [dubious].”
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