SMSF Trust Deed Update Document

All SMSF documents available on the Smarter platform are drafted and maintained by leading SMSF specialists:

• Ian Glenister (Legal Officer, Smarter SMSF), B.Juris  LL.B PC SMSF (Uni Adel) SSA^™
• Chris Hill (Principal, Hill Legal), LL.B; B.Juris; Dip.FP; CFP; TEP; LIV Accredited Specialist; SSA^™
• Aaron Dunn (CEO, Smarter SMSF), B.Bus (Acc), CPA, SSA^™

You will require information about the fund, including:

• Fund Name, when the fund was established, etc.
• History of the fund including any previous variations including relevant clauses that allow for the update to occur.
• Trustee details, member information and any other parties to the fund’s deed which may include a founder and/or employer sponsor

All parties to the Deed will be required to sign, including the trustees or directors of the corporate trustee and members.  In some cases, additional parties such as a Founder or employer sponsor may also need to sign as a party to the deed.

Through the upgrade process, we can arrange for the removal of any additional party that you may not longer wish to have included in the documentation – they will still however need to sign the updated deed as being removed in this process.

There have been substantial changes through the super reforms that impact the way in which a fund needs to operate to comply with the new laws.  This includes, but is not limited to:

• Flexibility in making contributions – the rules of the fund have been updated to ensure all forms of authorised contributions can be accepted. The deed also provides an opportunity for contributions to be held by the trustee for a short period of time and allocated at a later date.  This can provide both tax benefits to an individual through contribution reserving but also potentially benefits making additional contributions due to the value of a member’s total superannuation balance at the end of a financial year.
• Flexibility in payment of income streams – the trust deed allows for the payment of various income streams from within the SMSF by establishing the pension as a special rule of the fund.  This is important, as over time the member may want to alter the terms and conditions of the income stream, such as adding or removing a reversionary beneficiary. This may occur without any loss of existing entitlements, including Age Pension.
• Creation of a ‘paramount document’ – the trust deed introduces a concept to allow for the member to decide which document they want to take precedent in the event of their death. In many instances, conflicts can exist between death benefit nominations and pensions that provide uncertainty around the payment of death benefits.  By establishing the paramount document through the rules of the fund, it removes any uncertainty for the trustees in the event of a member’s death.
• Ability to create various death benefit instructions – the updated trust deed will allow a member to dictate the level of flexibility or control they want in the payment of their death benefits. The rules of the fund allow for a binding death benefit nomination (including non-lapsing), non-binding death benefit nomination, along with SMSF Will which introduces specific instruction for the payment of death benefits.  This may include specific instructions for different superannuation interests of a member, specific assets to be transferred, etc.  All death benefit nominations allow for cascading decisions in the event that a nominated beneficiary pre-deceases the member.
• Estate planning flexibility with transfer balance cap – the rules of the fund provide complete flexibility for a surviving beneficiary to choose how death benefits are to be paid to them in the event of a member’s death and to be able to take the necessary steps to comply with their own transfer balance cap within the prescribed timeframes. For example, this may include commencing a death benefit income stream, in addition to undertaking a rollback, in part or full, of the beneficiary’s existing pension to ensure that they do not breach their transfer balance cap.
• Flexibility in fund earnings methodology – the rules of the fund allow to trustee to adopt different methods to attribute fund earnings. This can be beneficial where the trustee wishes to adopt an investment reserve, or an alternate approach to allocating income for member specific investment strategies as a result of the prohibition for an SMSF to claim tax exemption using the segregated method where a member is in excess of $1.6 million.
• Guardians for fund members – the governing rules allow for a member to appoint a fund guardian so that upon the death of the member, the guardian will police the payment of the member’s death benefits to ensure that they reach their intended recipients. This is particularly beneficial for blended families (multiple marriages), or where there are special needs recipients (e.g. individuals who may be financially irresponsible).

You can view our sample client letter about the reasons to upgrade your fund’s trust deeds.

Smarter SMSF offerings two models for bulk trust deed upgrades:

1. a discounted per document fee; or
2. as part of a monthly membership fee (with minimum time period)

See our additional FAQs for details of the membership bulk deed update offer.

You can contact us to request further information about bulk deed updates.

Whilst providing the ability to access trust deed updates on a per fund basis, we also provide an alternate model based on access as a member.

We know with the implementation of the super reforms many of our existing members and other practices have undertaken trust deed upgrades.  Under our monthly subscription model, based upon the number of funds required to be upgraded, in many cases this will also breach our fair use policy around document generation. To deal with this matter, we are offering a solution that provides a minimum contract period of 12 months at $1,310 + GST p/mth.

The commitment is based upon the number of funds that would require trust deed updates.

We believe the benefit of this subscription option is significant to a practice as:

• you can spread your cost of the deed upgrades over the minimum contract period (not pay for it all upfront);
• access our industry leading SMSF trust deed to complete the updates; and
• most importantly, leverage all the benefits of membership for the duration of the contract period, including the ability to establish new SMSFs, order companies, access pension and compliance documents with the super reforms (including using key SMSF software integrations), attend training and access technical support.

Why the membership offer?

The reason why we are offering this membership solution is simple – we believe that our membership provides great value to practices to not only navigate through the super reforms, but also well into the future. By providing a minimum time-frame for membership, it is our aim to have you leveraging the benefits of our Smarter platform throughout this time and continue on at a higher member thereafter that you currently are.

We are seeing this with the ever growing number of practices that have been signing up to this special offer over the 12 months.