We’ve heard of the “money can’t buy happiness” quote and in a world that’s full of far too many choices around, allowing for consumerism to swallow us up bit by bit, it’s not surprising to get a sort of negative wealth connotation. However, no matter how much we are into holding up certain values, we can’t deny the importance of money even in maintaining an average kind of lifestyle. We need money for the bare necessities, be it food, clothing or having a roof over our head. We’ve got to admit, money does equal happiness, more so if you know your future is well secure.
There’s hardly anyone who hasn’t heard of superannuation funds. As it turns, these funds are your key to paving the road to stability for years to come, especially the sensitive days of old age. The reason SMSF is getting so popular is because it gives people the chance to become involved in the process of investing in their future by having a role in its management. Considering it’s such an important investment, it takes learning a great deal about it prior to undertaking it so you’ll make sure you decide wisely if you want to get the best outcome. This involves delving deeper into the choice of opting for a corporate trustee instead of an individual one.
Though it might seem the opposite, the purpose of corporate trustees, i.e. special purpose companies, is to make for easy handling of the fund. It is an investment that initially costs more, but you’ll see eventually it all contributes to the overall success so it more than pays off. A reliable corporate trustee can save you from administration as it rids you of time consuming paperwork and eliminates additional costs in the case of death of one of the individual trustees. It takes money and time in appointing a new individual trustee, along with the extra paperwork, you’ll get to deal with opening and closing bank accounts as well as re-registering the fund’s assets in the name of every trustee which is not the case with corporate trusteeship.
Sometimes, despite being aware of the rules, you might breach certain ones because of the lack of information or mismanagement. In the case of individual trustees, every member is considered responsible which means every member will be fined. When it comes to corporate companies, there is only one penalty that’s applied. Since the SMSF works on acquiring assets for pension, members are required to stick to this sole purpose and prove they aren’t using it for getting their personal assets aside the fund. This can be easier to prove with corporate trustees instead of individual ones and you can have peace of mind knowing the fund is protected from bankruptcy.
Moreover, in case of planning on investing through the SMSF, corporate trustees won’t limit your options. For instance, most lenders you’d contact about borrowing to purchase property will require the fund to have corporate trusteeship. Weighing in all of the advantages, it’s more than obvious why making the decision of having a special purpose company as your trustee is the way to go for a successful outcome.
