STRATEGY
Cognitive decline considerations
Older SMSF trustees may experience a degree of mental incapacity at some point in time, making the running of a super fund unfeasible. Rob Lavery examines some options available to address this situation.
ROB LAVERY is senior technical manager with knowIT Group.
40 selfmanagedsuper
The ATO’s most recent quarterly statistical data shows continued growth in both the number of SMSF members as well as the total number of funds. This continuing trend shows the attraction for people who want to be in control of their own superannuation. But what happens to these members when they turn 75, 80 or even 85? Regardless of age, SMSF trustees must still continue to conduct trustee meetings, monitor their fund’s investment strategy and investment results through differing economic climates, have regular meetings with their fund accountant, financial adviser and possibly actuary, correspond with regulators and auditors and so on.
The ATO’s statistics show that while more younger members are being attracted to SMSFs, more than 60 per cent of all SMSF members are still over the age of 55. At some point, older members may not be able to perform their trustee obligations. While many retirees may continue to have the time and desire to run their own fund, the reality is around 30 per cent of people over 80 experience some level of cognitive impairment. Such impairment can make running the fund as trustee difficult or impossible. If a member of a fund has lost mental capacity, they are no longer eligible to remain a trustee, even if they show a willingness to continue performing the role.
