Just when you think you've got all your affairs in order and its time to play!!! WRONG!!!
When I retired from my corporate position to work her in our jointly owned recruitment company, She and I with the help of some expert advisers, formed our own self managed superannuation fund (SMSF), firstly as a place to "park" my retirement benefit until retirement age, and also as the basis for our growing a "nest-egg" for our ultimate retirement which at that time could well have been 10, 20 years away...or never!!! We simply did not know, but we were astute enough to realise the merit of saving as hard as we could for our "twilight years". We were advised at that time as sole members and beneficiaries of the fund, to act in our own right as joint and several trustees and we were assured we should never have to change our superannuation fund trust deed, alter bank accounts or restructure this retirement vehicle ever again!!
Well...nothing is forever and some seven years later circumstance would lead us to sell our squeaky clean little business; and one of the very first things we needed to do was to amend our Trust Deed - you see, our company features heavily in the original deed as Principal Employer of us, the Fund's two only members and sole beneficiaries. So we dutifully attended to that and our drafting lawyer proudly commented : "you'll never have to change it again"....yeah, right, but so far, 7 years on, it has proved solid.
And so as we are merrily going about our hectic retirement, our investment advisor has recently suggested we reorganise our portfolio yet again by moving from joint individual trustees..US..to a special purpose company as Trustee with Her and Me as sole shareholders and Directors. So what is the difference you ask, as nothing really seems to have changed? And in essence nothing has in that we remain in absolute control of our "nest-egg", except we act through the guise of directors of a corporate trustee. But the real point of difference is a subtle one. Whereas in the event of the demise (death) of one of us, the other, as a sole remaining trustee cannot legally operate the Fund, whereas a sole director of a special purpose company can....at least that's how I understand it. And whilst there are changes that can be made if needs, be to appoint another trustee, its the last thing you want to be doing when grieving the loss of a dear departed loved one. Even during that difficult time, the surviving partner needs ready access to funds for funeral costs and day to day living expenses and it would be horrendous to think that monies were frozen and inaccessible especially at such a sensitive time!
I'm pleased to advise we are part way through the transition - we've already secured a special purpose company (with us as sole directors), whose only activity is to act as a Trustee - as such it does not need to lodge tax returns etc, this falling to the superannuation fund itself. We've passed all necessary resolutions and opened new bank accounts to reflect the new corporate trustee. All that remains now is to notify the registers of all investment stocks in the portfolio, the tax office and any other regulatory governing bodies.
So YES.. a very boring subject but nevertheless a highly important aspect of keeping your affairs in order - especially as we get older and closer to the inevitable. So make the appropriate inquiries of your professional advisers and see what is needed in your jurisdiction. Like me, you'll rest easy knowing you've done everything to leave things in good order for your partner when you check out!
...and remember...have a fabulous retirementLIFE....
