“What I’ve been doing is get people to work out the chain of succession, and once you can do that you’re pretty well right,” Mr Abbott said. 

“You can mirror that in your trust, you can mirror it in your SMSF, so that if something happens to someone, the next in line should also be the executor in your estate. It means that it becomes seamless, so if someone dies the whole thing passes to that person and they control everything.”

Mr Abbott said the concept of an appointor within a family trust, and similarly a leading member within an SMSF, would help to ensure adequate control following the death or incapacity of an SMSF trustee.

“You can have a leading member or appointor, [and] if they don’t like the trustee, they can kick them out. Then if there is no appointor, if they become incapacitated or they retire or die, there needs to be a succession plan for the appointor,” he said.

“It should be that the same leading member for the super fund is also the appointor, and when that person dies, they relinquish their leading membership and their appointorship as well. 

“It works perfectly and it seems to be sensible, but unfortunately, most of the trust deeds I see will only have one appointor, and when that passes away, that appointorship falls away and the trustee becomes the person that can control the fund.”

Mr Abbott said such a plan would help to prevent legal disputes following the death of an SMSF trustee by ensuring continuity across different structures of a client’s assets.

“If you’ve got a different executor and SMSF trustee, this is where the cases are because there is no control mechanism inside the SMSF, and if the executor wants the money out of the SMSF and you’ve got someone in there who doesn’t want to pass the money, obviously there is going to be a fight between the two,” he said.  

“Whereas if you’ve got the executor being the next-in-line leading member, they control the whole process, and if they are the next-in-line appointor, they are controlling the whole family wealth and putting protection around it. If you don’t have all that, for larger funds and trusts, it’s going to create a drama.”

While there were risks with putting financial control of all three structures in the hands of one person, particularly in the case of blended families, Mr Abbott said these risks could be reduced by creating separate trusts and SMSFs for each family group.