With the start date for the 2016 budget changes to
superannuation approaching, it is time to consider whether current
SMSF trust deeds will be appropriate under the new
Why consider an update to a SMSF trust deed now?
Some SMSF trust deeds will still be adequate, but there are a
significant number that contain provisions inconsistent with the
new rules, or do not have appropriate terms.
Many SMSF trust deeds were amended in 2007 and have not been
touched since. In addition to the new rules, there are reasons to
update now, including recent innovations in SMSF trust deed
drafting, cases on binding nominations and conflicts of interest as
well as substantial guidance from the ATO on a range of
superannuation issues. These would be advantageous to have in your
SMSF trust deed.
What should I look for in a SMSF trust deed?
When contemplating an SMSF trust deed update, consider the
Does the deed automatically remove the limitations imposed in a
transition to retirement income stream when the pensioner satisfies
a full cashing condition?
Can the terms of a pension change without needing to formally
stop and restart the pension, including the ability to add, remove
or alter the reversionary beneficiary?
Are there sufficient options in the death benefit payment
provisions? Can the trustee pay child pensions or to a
superannuation proceeds trust?
Are the binding death benefit nomination and reversionary
pension provisions simple to use? Are there unnecessary procedural
requirements or restrictions that may render binding nominations
Are there other death benefit control mechanisms, such as a
death benefit guardian?
Is the trust deed clear about priority of death benefit lock in
provisions and that future variations cannot change binding death
benefit arrangements inadvertently?
Can the trustee comply with the new forms of commutation
authorities and paying excess transfer balance tax, even without
the consent of the member?
Does the trust deed allow for reserving of contributions and
Is it clear what attorneys can and cannot do on behalf of a
member and are the powers appropriate?
Can the trustee segregate investments even for members not in
Are there mechanisms to resolve disputes between members so
they can exit the fund without consent of the others?
As with everything with SMSFs, it is important to ensure the
trust deed will allow you to do the things you want and need to
Cooper Grace Ward is a leading Australian law firm based in
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
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Personal Property Securities Act 2009 is one of the most significant commercial law reforms in recent times.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).