A Discussion with Julie Steed on SMSFS in Unexpected Circumstances

Julie SteedWe recently sat down with Julie Steed, Senior Technical Services Manager at Australian Executor Trustees as she provides her thoughts of the impact on SMSFs when dealing with unexpected circumstances in family, relationships or businesses and how to deal with them. Julie will be delving further into this issue at the upcoming seminar, Superannuation Essentials, on Friday 20 March.


What is one of the most significant changes in terms of how SMSF practitioners treat unexpected situations?

Advisers will need to think about the FASEA Code of Ethics and determine whether the client’s changed circumstances will create a conflict under Standard 3 – You must not advise, refer or act in any other manner where you have a conflict of interest or duty.  Although many practitioners already have business policies in respect of advising both members of a couple who are divorcing, the Code will require some practitioners to revisit their policies and some practitioners to adopt new policies.  The explanatory memorandum provides a concise example of a couple divorcing and their interests no longer being the same. An adviser’s duty to one member of the couple will conflict with their duty to the other member of the couple therefore the adviser is unable to act for both.


What is one of the major potential SMSF compliance issues that occurs on divorce?

The structure of the SMSF trustee is a really important consideration as it can result in the fund not meeting the definition of an SMSF – if you fail to meet the definition, there are no tax concessions. If one member is leaving the fund it is important to make sure they are removed as a director (or trustee). If the divorce is acrimonious, removing a trustee after they have left the fund can become very problematic!


What should SMSF advisers consider at the first place when unexpected circumstances occur?

As with all things SMSF, the first place to start is the fund’s trust deed. Are there provisions for dealing with the event that has occurred? If not, what does the trust deed state in terms of dispute resolution processes?


What is one of the common mistakes SMSF practitioners usually make when they deal with business disagreement?

The most common mistake is failing to plan. It is important that advisers alert clients to the types of issues that may cause disagreement and clients need to appreciate the potential pitfalls before they enter arrangements.  Having a process for dealing with disputes is also essential.


Why do you think SMSF advisers should attend your session and how can they benefit from the presentation?

This session will provide practical guidance for dealing with disputes and family law settlements and will cover a number of case study scenarios.

Julie Steed has more than 25 years of experience in the superannuation industry as a technical specialist, consultant and client services manager. Julie is responsible for the provision of superannuation technical information, specialising in self-managed super funds and small APRA funds. Julie has extensive experience in assisting trustees, employers and service providers meet a wide range of prudential responsibilities and in helping advisers provide quality services to their clients. Julie is a Senior Fellow of Finsia, a Fellow of ASFA and an accredited SMSF Specialist Advisor™ with the SMSF Association. Julie is a regular speaker on superannuation at client seminars, professional development days and industry events. Connect with Julie via email or LinkedIn