In fact, 70 per cent of SMSFs as at June 2014 had two members - with the vast majority being in a marital relationship.
It is not as widely recognised that almost a quarter of SMSFs are single-member funds - 23 per cent to be exact, according to the tax office's statistical report for 2013-14.
Although the SMSFs are permitted to have up to four members - providing an opportunity for, say, adult children to join their ageing parents' SMSF - a relatively small percentage of funds take this course.
ATO statistics show that three and four-member SMSFs each make up four per cent of self-managed funds.
Of course, many investors intentionally setup a single-member SMSF. And many two-member SMSFs may become single-member funds following the death of a member or perhaps with the splitting of super savings following a marital breakdown.
Particularly given that more than 130,000 individuals are the sole members of their SMSFs, it is worth looking at how superannuation law applies to single-member funds.
Under the Superannuation Industry (Supervision) Act, a single-member SMSF must have a corporate trustee (with up to two directors) or two individual trustees. And the sole member must be either a director of the corporate trustee or one of the two individual trustees.
No doubt as part of their estate planning, numerous members of two-person SMSFs are considering what to do with their super funds should one member predecease the other. Should the fund continue as a single-member SMSF? Much will obviously depend on personal circumstances including perhaps any relevant professional advice received and the level of interest that the surviving member has in self-managed super.
As editor Stuart Jones writes in the Thomson Reuters Australian Superannuation Handbook 2015-16, a former two-person SMSF does not immediately become a single-member SMSF upon the death of a member. Such a fund is given six months to meet the requirements for being an SMSF by appointing a corporate trustee or appointing a second individual trustee.
Discussions about single-member trustees and their trustee requirements may encourage you to think further about what is the most-appropriate trustee arrangement for your SMSF - individual trustees or a corporate trustee. See An SMSF trustee decision for the long, long haul, Smart Investing, September 3, 2015.
By Robin Bowerman
Principal & Head of Retail, Vanguard Investments Australia
20 March 2016