Should Your Children Be in Your SMSF?

Your self-managed superannuation fund (SMSF) is a method used to save for retirement. SMSF is different than other super funds because you run these funds as the investor. Many questions arise during the planning and investing of this fund. One main question that people ask is if their children should be included in your SMSF.

Self-managed Superannuation Fund

Before including or not including your children in your self-managed superannuation funds, you must first understand how the process works. It is important to know that when owning an SMSF, you must comply with super and tax laws throughout the process. You are in charge of making investment decisions. SMSF is a major financial decision, and you must have the time to commit to the investment and the knowledge. If you have the right knowledge for the self-managed super, then you will get what you are expecting from the investment.

SMSF Benefit for Members and Family Members

An SMSF must be only run for the purpose of retirement benefits for yourself and family members. This reason must not be used to get early access to your super or to be used to pay for house décor effects for example. This usage of the super is illegal. Managing your funds must be managed by the law. If you create a super illegally, you are subject to punitive legal actions. It is also important to understand that the maximum of four members can be included in the SMSF as trustees. The trustees included in the SMSF all have the right to make financial decisions to the investment. It is most common for two members to be trustees on a super and they are usually spouses. This decision making is usually straight forward.

Including Children in Your SMSF

Self-managed super fund investors at some point invite their children to become members of their fund. It is not uncommon and for many it seems like a smart move for all trustees. Inviting more trustees to the fund increases the balance for a property deposit, also, to saving on fees associated with the super. One important factor to think of when adding your children to you super is to imagine what would happen if they were to stop cooperating in the decision-making process. Not assisting in the decision making of the super will, in turn, make it harder for the other members to make sound decisions when needed. Another reason including your children in the super is in business situations. If family members are in business together, the super will allow their super balances to acquire commercial property. Commercial property depends on the location of the enterprise as well. Even though family members are in the same company together, it is still important to think about the outcome of the super in the event your child discontinues interest in the matter.

If you decide to include your kids, it is a wise decision to ask questions to a financial advisor before adding any trustees to the super. There are many aspects of the process that you need to think about, and if you are not very knowledgeable on the subject, it will be beneficial to seek professional advice. is a great place to start your research and find the best contacts for professional advice.