There are many reasons why people may decide that an SMSF is no longer appropriate for them. Some of these may include:

• They no longer have the time, resources, interest or expertise to run the fund.
• A relationship breakdown occurs between members of the fund.
• A trustee has lost mental capacity or died.
• Low balances resulting in the costs of running an SMSF outweighing the benefits of running one.
• One or more of the members have relocated overseas.
• An alternative super fund may offer more simplicity and ease of administration.

If a trustee is unable or does not wish to run an SMSF anymore, they must either leave the SMSF or the SMSF must be wound up. This can be a complex and costly exercise, so it pays to engage an accountant or financial adviser to assist with the process.

Once an SMSF is wound up, it cannot be reactivated. A new fund would need to be set up.

Getting into an SMSF is relatively easy but getting out of it may be much harder. It is important to plan an exit strategy when establishing the SMSF to minimise the costs and risks.