In this edition of 'It depends', lawyer Nathan Rutherford talks about whether you need to update your superannuation trust deed.
Nathan, along with Sacha Robinson and Steven Cawood, will be covering this topic in more detail during their session 'Trust deed update – how to know ...', at our Annual Adviser Conference on 21 and 22 March. Register now to attend live at Sofitel Brisbane or virtually.
Video transcript
Hi. Welcome to It depends. At this year's Annual Advisor Conference on the 21st and 22nd of March, Sasha Robinson, Steven Cawood and I will be doing a short, practical seminar on when your trust deeds need to be updated. I'll be talking about self-managed super funds. So, today the question is: do I need to update my super fund trust deed? The answer is: it depends. I'll be talking about a few things at the advisor conference. But, today I wanted to leave you with three key dates to think about when looking through your client's trust deeds.
What happened in 1997?
1997 saw the introduction of binding death benefit nominations into the superannuation environment, and there have been a number of big changes to superannuation law in the 27 years since. So, it can be a little bit scary when we come across a trust deed that doesn't allow clients to make binding nominations. So, the first takeaway is, if your trust deed was made before 1997, it's time to update it to make sure your clients can do binding nominations.
What happened in 2007?
The simple super reforms in 2007 brought the concept of account-based pensions into superannuation law. This means that if your clients are using a trust deed from before 2007, then they might not be able to commence an account-based pension and they might be stuck with the old, allocated pensions and complying pensions, which are nowhere near as fun to deal with. So, if your client has a trust deed from before 2007, again, it's worth having a look at it and make sure it still suits the client's needs.
What happened in 2016?
2016 saw the budget changes to superannuation and at CGW we talk a lot about permissive and prescriptive trust deeds, and these are particularly relevant for the 2016 budget changes. We like permissive trust deeds because they deal with the really important things like binding nominations and allow the trustee to be flexible and do anything within superannuation law for the less important things. Prescriptive trust deeds, on the other hand, provide a very detailed list of rules about what the superannuation trustee can do and they're not as flexible as the permissive deeds. So, one of the risks if you have a pre 2016 deed is that the rules of a prescriptive trust deed might not be broad enough to allow the trustee to do everything that they need to do to deal with things like transfer balance caps in a really effective way. So, if your clients are using trust deeds from before 2016, we definitely recommend having a look at those and seeing if they need to be updated.
I'll be talking about all these things and more at the Annual Advisor conference and we hope to see you there.
Cooper Grace Ward is a leading Australian law firm based in Brisbane.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.
