08 Apr SPI Online Blog – Individual Trustees VS Corporate Trustees: Part 2
Written by Justin Beeton – Founder and Managing Director of The SMSF Club
This article appeared on http://spionline.com.au 03/04/13.
In August 2010 the District Court of NSW made a judgement that the owner of a residential investment property was liable for the death of a handyman. The owner of the property was successfully sued by the widow of a handyman who died while carrying repairs on the property.
Now, if the property was owned by a SMSF with individual trustees, and the damages payable exceeded the value of the SMSF investments and the properties public liability insurance, then the individuals trustees themselves might be personally liable for any shortfall.
How do you as trustee of a SMSF protect yourself from these types of personal losses?
Insurance – you need to ensure that any properties have appropriate insurance that also covers public liability if appropriate.
Investment selection – if your SMSF is going to purchase an older property that is going to require a lot of renovation or maintenance it will be more likely that potential accidents and injuries can occur. Ensure that this is considered when it comes to selecting a SMSF investment property.
Corporate trustee – this is the easiest and simplest method for SMSF trustees to protect themselves.
Read the full article here