.png)
I am auditing an SMSF – 2 members -Husband and wife.
I am aware that one of the two members in the fund has onset dementia.
In my email of standard questions to the trustee I ask:
“Are any members of the superannuation fund suffering any cognitive impediment, or mental incapacity? This would include memory loss, dementia
Do any members have a “Legal Personal Representative” to take over the members responsibilities “
The husband has advised me that he has an enduring power of attorney for his wife who has the onset dementia. Not yet Full blown Dementia.
What are my super fund audit requirements from here?
1)Should I sight the enduring power of attorney? _ and if so, are there any special things I should be looking for in the document?
2)The Wife is still shown as a director of the corporate trustee per ASIC .
Should the wife still sign off on the accounts and trustee declarations – she can still sign her name?
3)Should the Financial statements mention anything about her mental state, and the enduring power of attorney?
4) are there anything else I should consider or ask for.
One thing to consider is that just because the husband has an EPA for the wife, it does not mean he can sign the financials instead of her. The wife must first be removed as a trustee (or removed as a director of the trustee company). See SMSFR 2010/2 for more detail (particularly paragraph 7 and examples 2 & 3).
Thanks for the question, Peter.
It is certainly positive that Husband has an enduring power of attorney (EPA) in place for his Wife that has early-onset dementia.
It would be advisable to request to have a copy of the EPA document provided to you.
Whilst Wife has the capacity to sign her name, the issue at hand is whether she has the capacity to understand the documents she is signing.
At the risk of oversimplification, if she does not comprehend the documents she is signing, or even if she does comprehend in the moment, but may not be able to remember that she has signed them shortly thereafter, then with regret, it might be time for her to cease signing documents in relation to the fund.
In relation to the EPA, it presumably appoints Husband as the Legal Personal Representative of Wife in relation to all matters. It would be useful to review the EPA to ensure that it is sufficiently broad to either cover all matters, or if it is narrow in its application, in relation to certain matters only, that it explicitly lists the affairs of the SMSF.
The SIS Act at subsections 17A(3)(b)(i) and (ii) certainly contemplates the Legal Personal Representative of a fund member being the trustee/director of a corporate trustee whilst the fund member is under a legal disability or whilst the fund member has a Legal Personal Representative with an EPA.
I do not think there is any need for the financial statements to make a reference to her mental state.