Can an SMSF Have 6 Members?
Historically, self-managed super funds have been allowed to have anywhere between two and four members. Recently, however, a law was passed that now allows SMSFs to have up to six members. Each member is also required to be a trustee, unless the member is under the age of 18, in which case a parent or guardian can act as a trustee on their behalf. This change allows those with larger families to have more family members involved with the day-to-day operations of the fund as well as the investment options.
Factors to Consider Before Opting for a 6 Member Fund
Before choosing to add members to your self-managed super fund, you need to consider both the pros and cons of doing so. Some advantages of having a six-member fund include:
- Being able to split the costs associated with set-up, levies, and audits across more members, saving each member money
- Can remove the need for having multiple funds, saving even more money
- Help make it easier for families to improve their children’s financial future and education
- Increase the balance in the fund, allowing for more investment diversification, further increasing the balance
Some disadvantages of having a six-member fund include:
- Increased chance of disputes among fund members
- Every member is legally responsible for the fund, so everybody needs to understand their rights, responsibilities, and roles.
Before opting to increase the number of members in your SMSF, it is important to speak to a financial expert as well as a legal expert. Contact the financial experts at Mortgage House to learn more.