Example

Bob and Betty are individual trustees of their SMSF. During the year they divorce, and Betty resigns as trustee and rolls her money to a new fund. 

Bob is now the only member, so as an individual trustee he either needs to add another person as a trustee or switch to a corporate trustee. He can be the sole director of the corporate trustee, but he cannot remain as the sole individual trustee. As an individual trustee, the main issue to consider is who would be the best person to appoint as the replacement trustee given that the person would take on equal control of the management and investment of your super fund.

Once the trustee changes have been made, Bob may have to notify the relevant investment registries such as share registries, land titles offices and other investment bodies because of the change in name of the individual trustees as registered owners of the investment.

In contrast, if the fund had a corporate trustee, no changes would be needed to the registered ownership of the investments as they are recorded in the name of the corporate trustee ‘as trustee for’ the fund where there is no change. Bob would just have to notify ASIC of the changes to the directors, and he could continue as sole director.