DBA Lawyers is Australia’s leading SMSF law firm. We have been refining our SMSF deed for well over 20 years, making it the best SMSF deed available. Additionally, our SMSF deed contains numerous ‘value-added’ advantages that set it apart. Accordingly, our SMSF deed offers many benefits that are not found anywhere else.
All of the benefits discussed here are present whether an SMSF gets our deed on establishment, or whether an existing SMSF’s deed is varied to our deed.
2016 and 2017 superannuation reforms
- Rules are up to date for the 2016 superannuation reforms — our deed has been updated to cover the 2016 reforms, including having express powers covering the transfer balance cap and related requirements and greater flexibility to make elections or any tax choices, including for CGT relief.
- Rules are up to date for the 2017 changes to the superannuation and tax regulations — the Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulations 2017 (Cth) has amended the meaning of an account-based pension from 1 July 2017 and made other changes. Our rules cater for these changes and can be used to document valid pensions both prior to and from 1 July 2017.
Succession planning advantages
- Strategic rules for power to appoint and remove trustees — The old saying that ‘possession is nine-tenths of the law’ applies to SMSFs because, in practical sense, the trustee has ‘possession’ of the SMSF. Many SMSF disputes have essentially been legal fights over who gets to be the SMSF trustee. Our SMSF deed gives the members who hold more than 50% of benefits in the fund the power to appoint and remove the trustee. Many other deeds give this power either to the existing trustee (often this simply means the last person left alive, such as a surviving or second spouse) or to the members by headcount (this can lead to a majority of members with a small balance, such as two children, outvoting a member with a larger balance, such as a parent). Click here for more information on SMSF succession.
- Members’ wishes can be represented by attorney or executor — All rights given to a member can also be exercised by the member’s legal personal representative (‘LPR’). Accordingly, where a member is dead or incapacitated, their LPR (eg, the member’s attorney acting under an enduring power of attorney or, following death, the executors of the deceased estate) can exercise the member’s rights in their place. Many SMSF deeds do not provide for this, elevating the risk that a member’s wishes are ignored.
- Streamlined and effective binding death benefit nomination (‘BDBN’) rules — Many other SMSF deeds contain uncertain and challenge-prone BDBN powers. For example, most other deeds require BDBNs to be in a particular form in order to actually be binding. This can lead to members’ wishes being ignored on a technicality. To address this, our deed simplifies the BDBN documentation. Under our deed, the BDBN can also be used to make a pension automatically reversionary, overriding the pension documents where necessary.
- BDBN value-added template — A strategic BDBN template is provided with every SMSF deed.
- Allows for successor trustees — Our deed allows for successor trustees (for example, a trustee’s LPR) to step in as trustee on the death or loss of capacity of an existing trustee. The DBA Lawyers company contains mirroring mechanics for successor directors.
- Withdrawal of benefits before death — An appointed member representative is able to implement a withdrawal of benefits before a member’s death. Additionally, under our deed, the trustee has power to pay a benefit quickly by declaration of bare trust. This can be an advantage, for example, where a person loses capacity and may soon die.
- Power to admit conditional members — It is legally and practically very difficult to remove a member from an SMSF once there is a falling out. Our deed allows members to be admitted subject to certain trigger events that cause the member to be paid or rolled out. This can serve as a useful tool especially where a second spouse or children are included in an SMSF and there is a falling out.
Strategic and other advantages
- Latest SMSF strategies and traps are addressed — DBA Lawyers regularly builds the latest strategies into our SMSF deed (this includes related areas such as stamp duty and asset protection).
- Bankruptcy protection clauses — Our deed is drafted with a view to bankruptcy protection, eg, in minimising pension payments that could be accessible by creditors.
- Trustees empowered to do normally restricted things — Many do not realise that a trustee is not allowed to carry on a business (eg, a property development business), be remunerated for services, or invest in a single bulky asset without diversification, etc, unless the trust deed permits. A trustee could technically be sued for these things by a disgruntled beneficiary, especially if things have gone ‘pear shaped’. Our deed empowers the trustee to do these activities and more.
- Backed by lawyer support — All of our documents and services are supported by Australia’s leading SMSF lawyers. Using us for documents means you get the best support.
- Detailed memo and PDS — A detailed memo and PDS describing the operation of an SMSF is included with every SMSF deed. These documents can greatly assist members and trustees to understand their duties and entitlements.
- Lawyer sign-off every time — Every DBA Lawyers deed and document package is tailored and signed-off by one of our SMSF lawyers.
- Eligible for the Annual Update Service — For those who want peace of mind that an SMSF’s deed is kept up to date, we offer the Annual Update Service that issues a deed update each 1 July. A small annual cost applies. Many advisers enjoy an added benefit from the Annual Update Service because all their SMSFs have our latest deed, allowing for easier administration and compliance.
An SMSF’s deed is the cornerstone that makes or breaks many SMSF strategies. Accordingly, the DBA Lawyers SMSF deed represents tremendous value.
We also offer a large range of related documents and services which complement our SMSF deed.