The Enduring Power of Attorney

Section 17A of the SIS legislation sets out the conditions that a fund must satisfy in order to be a SMSF. One important requirement is that each member of an SMSF must also be a trustee of the fund or a director of the corporate trustee. Except in the case of single member funds, each trustee or director of the corporate trustee, is also a member of the SMSF.

However, in certain circumstances, it is impossible for the member to perform the trustee functions such as:

  • Member is going overseas for an indefinite period of time, or
  • Member has a temporary illness, or
  • Member becomes incapacitated

Under such circumstances for those who do not want to wind-up their self-managed superannuation fund, a viable strategy is to substitute the Trustee using an enduring power of attorney (EPA).

This is because section 17A (3)(b)(ii) of the SISA allows a Legal Personal Representative (LPR) who holds an EPA to be appointed as a trustee or a director of the trustee company in place of the member without causing the fund to cease to be an SMSF.

When the trustees decide to set up an EPA, it is important that the power of attorney must be enduring and in accordance with SIS and other relevant legislations.

The following steps need to be undertaken whilst appointing a Legal Personal Representative:

Corporate trustee & individual trustee

About the author

Naz Randeria is the Founder and Managing Director of Reliance Auditing Services. With more than 25 years’ experience in audit and accounting, Naz is an ASIC registered SMSF Auditor, SMSF Specialist Auditor, Registered Company Auditor, and Chartered Accountant.

She is actively involved in the SMSF audit sector and is passionate about sharing audit, compliance and SMSF knowledge with clients, professional colleagues and the wider public.

View Naz Randeria’s full profile

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DISCLAIMER: This information is an interpretation of rules, regulations and standards. It should not be considered as general or specific advice and neither purports, nor is intended to be advice on any particular matter. No responsibility can be accepted for those who act on the contents of this publication without first obtaining specific advice. Liability limited by a scheme approved under Professional Standards Legislation.