The Trust Deed is the core document of your SMSF,
and it sets out all the rules and regulations
specific to your fund. Most of the Trust Deeds in
use in SMSF have been adapted from the Trust Deeds
of Employer Superannuation Funds or other similar
entities, and as a result many contain provisions
that are either inappropriate or impossible for a
SMSF to fulfil.
Others, particularly those that are now quite old,
or were drafted by a lawyer not familiar with the
intricacies of a SMSF, do not include provisions to
allow the Beneficiaries of the Fund (yourselves) to
access all of the advantages available to SMSFs, in
terms of both investments and benefits. Examples of
this include restrictions on the following:
|
Issue |
Implication For The Fund |
|
|
Many deeds do not allow all of the
investment options available to a SMSF. |
|
|
Deeds often do not allow the full range
of pensions to be paid to a Member. Others
may not allow a Pension to be paid to a
Beneficiary in the case where a Member dies,
forcing that Beneficiary to take a Lump Sum. |
|
|
Not all deeds allow the flexiblity of
Reserves, which can be used for several
strategies such as to equalise balances
between members in a Fund. |
|
Non-Employer Contributions |
|
The deed may not allow non-employer
contributions. |
Many existing Funds are already in Breach of their
Trust Deed, without the Trustees, or in many cases
the Fund Accountant, even being aware.
The Ward Financial Group can have your existing
Fund's Deed assessed to determine its strengths and
weaknesses. If it is determined that your Deed does
not allow the flexibility required for your
particular situation, then we can refer you to an
appropriate lawyer to have the deed amended or
replaced.
Because of constant changes in legislation, such as
the recent Family Law amendments, it is usually a
good idea to update your Trust Deed periodically.
Does Your Deed Have A Product Disclosure Statement?
Your deed should now also have a combined Product
Disclosure Statement which should be written in
plain English to ensure that you, as the Trustees,
understand what is says.
Note: Actually amending or changing a Trust
Deed requires a Lawyer. While Ward Financial Group
can assist you in determining if your Trust Deed
will allow certain strategies or investments, and
can refer you to a Lawyer familiar with the issues
involved in SMSF Deeds, we are not qualified or
authorised to write or change the legal documents
ourselves.
