In a recent webinar, Mr Abbott said typically many of the assets within a business and SMSF have been put in joint names or a spouse’s name for tax purposes.

However, if there is a breakdown in a relationship, it can mean that one partner is left at a disadvantage, especially if the business and SMSF are wound up.

“Most accounts set up a trust and then there'll be a corporate trustee, which then has individual trustees,” he said.

“But the weakness of this structure is that most of these are set up for tax minimisation and streaming.”

To safeguard assets and wealth in an SMSF, especially one that includes a family business, Mr Abbott said a leading member discretionary trust can help ensure there is a clear line of succession.

A leading member discretionary trust is one of the best strategies to put in place for asset protection.

“As we have seen, the succession for the British Crown is well settled, and the majority of Australia knows the lineage. Likewise, the leading member discretionary trust provides for a predetermined succession plan going down one, two or more generations,” he said.

“We have had some clients who, on varying an existing discretionary trust, build six levels of succession. It is a crucial decision to be made upfront as a family’s wealth and control are in the hands of the leading member.”

He said traditional discretionary trusts fail to protect trustees and generally fail to deal with the transfer of control of the trust if something happens to the appointor.

A traditional set-up for a discretionary trust by an accountant or even a legal firm also does not provide a succession plan for three generations deep, the limitation of beneficiaries to bloodline only, or the capacity to deal with deaths or divorce of beneficiaries, simply and easily.

With a leading member discretionary trust, the head of the trust is the leading member appointor, not the trustee nor principal beneficiary.

Mr Abbott said the leading member appointor controls who can be the trustee and can veto many of the decisions of the trustee, much the same as the King has the power to veto decisions of the English Parliament.

“The leading member appointor can also determine when the trust is to be wound up and through their veto power which beneficiaries are to benefit from the trust and importantly limit the beneficiaries to bloodline lineage of the leading member or those persons or entities at the discretion of the leading member,” he said.

Mr Abbott said if an SMSF already has a discretionary trust, it can be upgraded to a leading member trust.

“Getting this right is critical to protecting your assets and family, so it’s important to have a professional set It up for you,” he said.