Disagreements regarding the payment of benefits, especially in funds which have parents and children, and disputes regarding payment of death benefits are also common.

In addition, there are often disputes between surviving family members arising from the payment of SMSF death benefits as compared to amounts received under the deceased’s will.

“Once a dispute has arisen, how easily and quickly they are resolved will often depend on the quality of the SMSF trust deed in terms of how its provisions deal with trustee disputes,” Mr Hor said.

“Otherwise, the general position is that trustees must act unanimously, meaning that deadlocks can result which may require an expensive trip to the court to resolve.”

Pre-emptive strategies to avoid or lessen the impact of a dispute include drafting the SMSF trustee deed to include dispute minimisation provisions.

These provisions could include allowing trustee decisions to be made by a simple majority rather than unanimously and providing a “casting vote” to a particular trustee in the event of an even vote or other deadlock.

Provisions could also include that where a dispute cannot be avoided, the deed would require the parties to go to mediation and arbitration before going to court.

Also speaking to SMSF Adviser, Gadens partner Kathleen Conroy said while recourse to the court will ultimately lead to an outcome, it will involve significant cost.

“These costs will commence to mount from the outset, with the well-advised party outlaying funds to undertake the processes and steps that are either required or prudent to be taken when considering court action,” Ms Conroy said.

“In these circumstances, fund members should consider hard wiring into the fund deed a mechanism to be followed for the resolution of disputes. This is not a golden 'fix' but, at the least, will provide some level of protection to the vulnerable or weaker disputant and, to be blunt, will help to protect trustees from themselves.”