AN SMSF conundrum came across my desk recently.

Fred*, the sole trustee of an SMSF, died without a will, with disastrous consequences:

 - The responsibility for managing and dispersing the estate devolves to the Public Trustee. They are conservative and take an age to make effective decisions.

 - The estate has been intestate for 4 years during, which

• • the SMSF has been unable to lodge annual returns – fines are starting to arrive
  • the investments within the estate are stuck and cannot be actively managed – irrespective of market conditions
  • the beneficiaries of the estate have received nothing so far
  • one of the investments is a small shareholding in another business. That business is equally paralysed – unable to make any decisions about succession or investments, as any investment it makes will also accrue to the deceased estate. An inequitable position.
  • trustee fees continue to be drawn down against the estate.

 - The wheels are slowly turning. The Trustee is engaging with the business in the estate looking to agree on a valuation. Because until that asset is sold, nothing else can happen.

In the meantime, we have lodged an appeal with the ATO.

And just in case you think this would not happen to your clients, please take note.

I see intestate estates across my desk every two to three months; and many trustee wills:

• cannot be found, often require extensive legal searches, some of which are unsuccessful. It makes the life of the executor fraught and has costly impacts on the value of the estate
• are out of date, opening them up to disputes.

Please check with your trustees

• that they have a will
• that it is up to date
• and that it is easy to find.

It will save a lot of expense and stress down the line.

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*name and key details changed to ensure the privacy of all concerned.