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Advantages of the DBA Lawyers SMSF deed (2020-21)

DBA Lawyers provides the best SMSF governing rules and related documents, with numerous value-added features. This article briefly explains why our SMSF documents are the best available.

Recent changes to DBA Lawyers’ SMSF governing rules

Our latest DBA Lawyers’ SMSF governing rules (version 2020/21) comes with the following upgrades:

  • enhanced binding death benefit nomination (‘BDBN’) provisions, including the ability for members to make a valid BDBN without having it witnessed (in consideration of COVID‑19 measures) (Click here for more information on these changes);
  • expanded release of benefits rules to specifically cover release for COVID-19 purposes;
  • expanded exclusion of beneficiaries’ powers to specifically allow for exclusion of ‘foreign persons’;
  • changes to reflect updated contribution acceptance rules;
  • improved clarity of borrowing powers; and
  • improved definitions and enhancements for clarity throughout.

Naturally, the above upgrades are on top of the already numerous value-added features our governing rules provide.

General features of the DBA Lawyers’ SMSF governing rules

  • Rules are up to date with superannuation law — We update our governing rules annually to cover all relevant changes (including superannuation law, case law and ATO materials).
  • Strategic rules for power to appoint and remove trustees — Members who hold more than 50% of benefits in the fund have the power to appoint and remove the trustee. Click here for more information on SMSF succession.
  • Allows for successor trustees — We provide for successor trustees (for example, a trustee’s legal personal representative (‘LPR’)) to step in as trustee on the death or loss of capacity of an existing trustee. The DBA Lawyers’ company constitution contains similar provisions for successor directors.
  • Streamlined and effective BDBN rules — Our BDBN documentation does not rely on the Superannuation Industry (Supervision) Act 1993 (Cth) (‘SISA’) or Superannuation Industry (Supervision) Regulations 1994 (Cth) (‘SISR’) provisions and provides a firm basis for making an effective BDBN. Click here for more information on BDBNs. We also provide express wording in the event there is any conflict between a reversionary nomination and a BDBN. Click here for more information. Our BDBN can be executed and witnessed via Zoom, Skype and similar technology. Moreover, given COVID-19 restrictions, from 4 May 2020 our deed empowers a BDBN to be made without any witness (Click here for more information on these changes).
  • BDBN value-added template — A strategic BDBN template is provided which, among other things, allows for two levels of cascading and allows a member to make their pension automatically reversionary, overriding the pension documents as necessary.
  • Members’ wishes can be represented by attorney or executor — A member’s rights can also be exercised by the member’s LPR. Accordingly, where a member dies or is incapacitated, their LPR (eg, the member’s attorney acting under an enduring power of attorney or, following their death, the executors of the deceased’s estate) can exercise the member’s rights in the member’s place, eg, a withdrawal of benefits before a member’s death if the member has only days to live.
  • Power to admit conditional members — It is very difficult to remove a member from an SMSF once there is a falling out. Members can be admitted subject to certain trigger events that force them to exit the fund automatically. 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. Refer to our articles entitled The advantages of conditional membership in an SMSF and Admit a conditional member.

Strategic and other advantages of the DBA Lawyers’ SMSF governing rules

  • Latest SMSF strategies and traps covered — We include the latest SMSF, tax, stamp duty and asset protection strategies in our SMSF governing rules. For example, our SMSF governing rules include protection so pension payments cannot be accessed by creditors.
  • Trustees empowered to do normally restricted things — People are regularly unaware that many common, and often necessary, SMSF trustee activities are prohibited unless the trust’s governing rules allow for this. For example, there are general prohibitions on SMSF trustees carrying on a business (eg, a property development business), being remunerated for their services, investing in a non-income producing asset or alternatively in a single bulky asset without diversification. Our governing rules empower these activities and many more commercially realistic ventures. We have found that other suppliers’ documents frequently do not include these express permissions, and therefore expose trustees to being sued by a disgruntled beneficiary when they suffer any loss or damage.
  • Detailed memo and PDS — A detailed SMSF memo and PDS are included with our new SMSF and SMSF deed updates. These documents, in addition to complying with the law, can greatly assist members and trustees to understand their duties and entitlements.
  • Eligible for the Annual Update Service — For those who want peace of mind that their SMSF’s governing rules are kept up to date, we offer the Annual Update Service that provides our latest SMSF governing rules, PDS and SMSF Memo each 1 July for a small annual cost. Many advisers enjoy an added benefit from the Annual Update Service because all their SMSFs have our latest governing rules, allowing for easier administration and compliance.
  • Backed by lawyer support — Every DBA Lawyers document package is reviewed and signed-off by one of our expert SMSF lawyers. Using us for documents means you get the best review and support possible. Many other suppliers claim they have legal sign-off but advisers should be wary of a suppliers’ terms and conditions.

Risks of using a non-DBA Lawyers’ SMSF deed and governing rules

In contrast to DBA Lawyers’ SMSF governing rules, we briefly summarise some of the shortcomings we find when reviewing other suppliers’ documents:

  • Many SMSF governing rules do not provide appropriate conflict of interest rules.
  • Despite some suppliers claiming they have the latest provisions, their documents were considerably out of date and did not correctly reflect the law nor the latest strategies and have not been revised for the recent COVID-19 changes.
  • Some suppliers’ SMSF deeds or governing rules do not provide firm BDBN provisions that can be relied on, especially where the governing rules rely on the BDBN criteria in the SISA and the SISR. The Supreme Court of South Australia in Retail Employees Superannuation Pty Ltd v Pain [2016] SASC 121 stated at [512]:

The structure and drafting of sections 58 and 59 of the SIS Act and regulation 6.17A of the SIS Regulations give rise to ambiguities, uncertainties and potentially unintended consequences … It is highly desirable that those provisions be reviewed by the Commonwealth and recast.

  • This analysis was confirmed in H.E.S.T. Australia Ltd v Inkley [2018] SASC 127.
  • The BDBN provisions in the DBA Lawyers’ SMSF governing rules do not rely on the SISA or SISR provisions. Many other SMSF suppliers’ deeds do and render them prone to attack.
  • Note that DBA Lawyers is regularly engaged to challenge BDBNs and our general view is that no BDBN is binding unless it is proved to an SMSF lawyer’s satisfaction. Refer to the article we prepared prior to the REST decision above entitled The legal minefield of BDBNs (updated) where we outline several factors on why most BDBNs fail. This is one reason why we strongly recommend that each BDBN be prepared or at least reviewed by a lawyer with SMSF expertise.
  • Some other suppliers’ deeds do not provide the requisite power to ensure that an automatically reversionary pension will satisfy the ATO’s criteria in TR 2013/5 and LCG 2017/3. The SMSF governing rules must, among other things, include a power to fetter or limit the trustee’s discretion. The ATO consider that any discretion will render an automatically reversionary pension useless.
  • Moreover, many other suppliers’ SMSF governing rules do not expressly deal with what takes priority in the event that a reversionary pension nomination conflicts with a BDBN (assuming both of these requests are valid and binding). For example, under some, a pension nomination will render a BDBN and any related estate planning based on that BDBN useless. This may give rise to considerable risk unless the user has a sound understanding of how to make a valid pension nomination and BDBN. Click here for an article on point with more information.

An SMSF’s governing rules is the cornerstone that makes or breaks many SMSF strategies. Accordingly, the DBA Lawyers’ SMSF governing rules represent tremendous value.

For an article on why SMSF deeds should be ordered from a law firm rather than a non-qualified supplier click here.

A new SMSF (with our governing rules) can be ordered here. An update to an existing SMSF’s deed can be ordered here.

We also offer a large range of related documents and services which complement our SMSF governing rules.

Related articles:

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Note: DBA Lawyers hold SMSF CPD training at venues all around. For more details or to register, visit or call 03 9092 9400.

For more information regarding how DBA Lawyers can assist in your SMSF practice, visit

By Shaun Backhaus ([email protected]), Lawyer, and Daniel Butler ([email protected]), Director, DBA Lawyers

18 May 2020

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