Appointing an Enduring Power of Attorney (EPoA) can ensure your SMSF remains compliant when you move overseas and become non-resident for an extended period.
Key information
The person you appoint (Attorney) replaces you as trustee (or director of the trustee company) and takes over responsibility for the SMSF. However, you remain a member of the SMSF. You can retain some control over the specific investment choices at the discretion of the Attorney who dictates the high-level investment strategy.
Notably, the Attorney acts as trustee in their own right - they do not act as an agent on your behalf. Therefore, they are personally liable for any fines imposed. There must be strong trust between you and the person you appoint as your Attorney.
Your EPoA document can specify how much authority the Attorney is given. For example:
Financial matters only;
Financial matters and health decisions;
Specific powers only - e.g. control of the SMSF;
For compliance with superannuation laws, the Attorney must be appointed under an Enduring Power of Attorney. Therefore, a general or limited power of attorney document is not sufficient.
You can also determine when the attorney steps in - i.e. immediately, or at a specific time or trigger point in the future.
Steps to appoint an EPoA
Grow can arrange the EPoA documents via our specialist legal document provider when appointing an attorney only for your SMSF. However, if you need to select an attorney for other personal financial matters or health decisions, you should engage a legal provider directly.
The individual you select as your Attorney must be eligible to become a trustee of an SMSF and not be a disqualified person. The ATO has a checklist here.
Once you've decided on who your Attorney will be and they've agreed, the following needs to happen:
Provide the following information for the Attorney to Grow:
➡︎ Full legal name;
➡︎ Date of birth;
➡︎ Place of birth;
➡︎ Tax File Number (TFN);
➡︎ Contact details (home address, email, mobile number);
The Attorney must complete the ID verification process with Grow;
Grow will prepare the EPoA documents for signing and witnessing as per state requirements;
➡︎ If you need an EPoA covering non-SMSF personal financial or health matters, engage a legal professional;
➡︎ For simplicity, it's best EPoA documents are signed wet-ink rather than electronically;
Provide a copy of the signed and witnessed EPoA documents to Grow;
Where your SMSF has a company trustee, the attorney needs to obtain a Director ID;
Grow will notify the ATO and ASIC of the change of associates when the attorney steps in as trustee;
➡︎ This could be immediately or at a specific future date;
Fees
Where Grow obtains the SMSF-specific EPoA documents on your behalf, a fee of $385 applies which is paid by the SMSF.
If a new member is being added to the SMSF, then a separate fee of $330 is also charged.
FAQs
Can I still control the investment decisions of the SMSF if my Attorney is acting as trustee?
The Trustee (attorney) is responsible for high-level decision making including creating a suitable investment strategy.
It is possible for the Trustee to delegate some level of investment choice to the member, provided it's within the scope if the investment strategy.
Can I appoint an EPoA if I need to declare bankruptcy as a way to stay a member of the SMSF and remain compliant?
No.
Your only option is to apply to the Federal Court for permission to stay as trustee of your SMSF. However, this would only be granted in very limited circumstances as per a recent case.
I am currently an overseas resident with superannuation with an APRA fund. If I appoint an Australian-based EPoA, can they set up an SMSF for me?
Yes, but 👇
There are other considerations that must be covered to ensure the SMSF is considered an 'Australian super fund'.
The biggest is that the transfer of super from an APRA-regulated super fund (industry/retail super fund) will make the overseas person an 'active member' - therefore failing one of the mandatory conditions to be considered an Australian Super fund if that member has more than 50% of the SMSF assets (with Australian resident members having the remainder).