- Why should I choose a DBA SMSF?In short, DBA’s SMSF deed and related documentation is up to date and of the highest quality in Australia. Please click here for further information.
- What are the features of DBA’s deed or where can I get more information?See the questions and information under ‘DBA Deed’ below.
Should my SMSF have a corporate trustee or individual trustees?
We generally recommend that an SMSF have a corporate trustee, rather than individual trustees. See table below for further information:
Corporate Trustee Individual Trustees Continuous succession
A company has an indefinite life span; in other words, it cannot die. A company makes succession to control more certain on death or incapacity.
Ceases upon death
Timely action must be taken on death to ensure the trustee/member rules are satisfied. (SMSF rules do not allow a sole individual trustee/member SMSF.)
On the admission or cessation of membership, that person becomes or ceases to be a director of the company. Thus, the title to all assets remains in the company's name.
Extra and costly paperwork
The admission or cessation of a member requires that person to become or cease to be an individual trustee. As trust assets must be held in all trustees names, the title to all assets to be transferred to the new trustees.
Sole member SMSF
You can have an SMSF where one individual is both the sole member and the sole director.
Sole member SMSF
A sole member SMSF must have two individual trustees.
Greater asset protection
As companies have limited liability, they provide greater protection where a party sues the trustee for damages.
Less asset protection
If an individual trustee suffers any liability, the trustee's personal assets are also exposed.
Estate planning flexibility
A company offers greater flexibility for estate planning, as the trustee does not change as a result of the death of a member.
Extra administration and costs
The death of a member gives rise to considerable administrative work and costs at an inopportune time.
The administrative penalty regime that commences from 1 July 2014 typically only applies to a company once for each contravention.
A penalty can be imposed from 1 July 2014 on each individual trustee for each contravention. Thus, having two individual trustees can double the administrative penalty that would otherwise apply to a corporate trustee.
It is easier to evidence that the central management and control ('CMC') of a corporate trustee remains in Australia.
An SMSF with individual trustees would generally have greater difficulty showing its CMC remained in Australia.
Lump sums and pensions
An SMSF with a corporate trustee can pay benefits either as pensions or as lump sums.
Lump sums or surrendering a pension
A member must surrender their pension entitlement if they wish to obtain a lump sum (a fund must have its primary purpose of paying a pension). Thus, extra paperwork is needed to surrender a pension entitlement to a lump sum payment.
Please carefully consider setting up the correct structure from the beginning, as significant costs and administrative effort is involved in any future change of trustee.
- Does my SMSF deed need updating?
Effective Date Description Impact 1 July 2007 Major super reforms These reforms were substantial and included, among other things:
Removal of the reasonable benefits limit (RBL) regime
Making super payments tax free after age 60
Substantial limitations on contributions
Introduction of the account-based pension and transition to retirement income stream ('TRIS')
A range of other measures
1 July 2017 Major super reforms These reforms were substantial and included, among other things:
Substantial further limits on contributions including a $1.6M total superannuation balance limit over which no further non-concessional contributions can be made
Introduction of a $1.6M lifetime transfer balance cap on amounts that can be transferred towards funding a pension
The tax exemption on earnings derived from assets supporting a TRIS removed unless, broadly, the member is retired or attains 65
A range of other measures
When major super reforms are introduced, it is generally recommended that an SMSF deed be updated. This is the case even if the deed was last updated in the prior 5 years.
Given that there are regular legislative, regulatory and practical developments occurring on an ongoing and unpredictable basis (given the Government typically has no long-term vision but is keen on raising extra tax from each annual Federal Budget), we generally recommend that an SMSF deed be reviewed and, if needed, updated at least on a 5 yearly cycle (ignoring major super reforms as set out above which may require an update shortly after the reform has been finalised as law).
We keep our clients who use our deed notified of changes impacting their deeds on at least an annual basis. We are also pleased to review and provide comment on whether an SMSF deed requires any update.
- Why should I order a company from DBA?Click here for information relating to ordering a new company from DBA.
- Why should I order a trust from DBA?For information regarding why you should order a discretionary trust from DBA, refer to our article ‘Why should you order trusts from DBA Lawyers?’ by clicking here.
Some good reasons to use our trust deeds
The importance of a quality trust deed
- DBA provides high quality, innovative trust deed packages that provide maximum flexibility in relation to the latest planning strategies.
- Buying a quality package actually saves you money. Our deeds are regularly reviewed and revised by some of Australia’s leading tax and succession planning lawyers so that the latest tax and trust law changes are accommodated. Each deed package is reviewed and signed-off by a lawyer.
- DBA focuses on trust documentation and related services. We work at the ‘coal face’, handling technical queries on a daily basis. We have the resources and technical skills to keep up to date with ongoing developments and provide ongoing technical support and assistance throughout the life of the trust.
- Our trust deeds are written to be easily understood and the trust easily administered. We cater for different types of amounts to be included in tax law income to ensure the deed is not restricted to trust law income. Our trust deeds are maintained by experienced taxation lawyers who keep abreast of important court or tribunal cases, ATO rulings or legislative amendments which affect the operation of our trusts.
- Many other suppliers of trust deeds are using antiquated precedents and do not provide technical support, which can give rise to significant tax and legal problems.
- A trust is difficult to vary. A subsequent variation of a trust deed can give rise to a raft of tax and stamp duty issues.
- Because DBA is a leading tax, estate planning and superannuation law firm, we also provide related tax and succession planning advice and services.
- Is GST included in the price?All prices quoted on this website include GST unless stated otherwise.Postage disbursement costs of fixed fee products are an additional $75 which includes disbursement by express post.
- How do I order?Order online by selecting the ‘Order Online’ button located at the top of the relevant product page. Alternatively, select Online Ordering at the top of our main page and search for the relevant product once you have logged in. Registration for new users is required to use our online ordering portal.We also offer order forms that are available to download, by selecting the ‘Download Order Form’ button that is located at the top of each product’s page. Once you have completed an order form please email to us at [email protected]Please note, online orders will receive priority service.
- Should I send in payment when I send in the order form?Payment should only be made once an invoice has been issued to you.
- How do I pay DBA lawyers for documents or other legal services?We issue an invoice with the documents when emailed to you. For other legal services we generally invoice at regular intervals or on completion of each assignment. Payments can be made via by credit card, electronic funds transfer (‘EFT’) and cheque. Please see the instructions on our invoice which provide:
If paying by CREDIT CARD: go to https://www.bpoint.com.au/payments/dbalawyers (secured by Commonwealth Bank) and in reference number enter invoice reference, eg: WKG1234
If paying by EFT: BSB is 063215, account number is 10247596 and in description enter the invoice reference, eg: WKG1234
If paying by CHEQUE: post cheque and the payment slip (on invoice) to DBA Lawyers Pty Ltd, PO Box 2085, South Melbourne, Victoria 3205
- What does ‘POA’ mean?POA stands for ‘price on application’. If a product is marked POA, we can provide an estimate once we have a clear idea of what is required.
- Will you ever charge me more than the amount quoted on this website?As a general rule, no. However, where is a product is ordered without a completed DBA order form or without complete documents provided, we may need to contact you to advise that in order to complete the product the quoted fee may need to be adjusted. Also note that courier costs and other disbursements are generally not included in quotes but are added to the invoice.Also, prices do not include our time involved in advising you, meeting with you to sign or complete the documents or attending to the lodgment of forms with the ATO or State Revenue Office for affixing stamp duty. Therefore, advice and special instructions may give rise to an additional fee for professional services where it is outside the scope of a standard product order. Naturally, you will be advised if any additional professional charge will apply. Consultations, meetings and advice are charged on our hourly fee rates. If the service/product you order requires additional work, we will contact you for your approval before commencing the additional work.
- Are all prices quoted in Australian dollars?Yes.
Due to the ongoing and substantial recent superannuation reforms, at least every five years, we recommend that everyone consider the need to upgrade their deeds. This is particularly critical where the members of an SMSF intend to consider superannuation or retirement planning in the near future.
We acknowledge that if deeds have been updated recently, some may prefer not to upgrade them again immediately and may do so on a case-by-case basis. We strongly recommend, however, that such deeds be reviewed in detail before any major decision is implemented, eg, commencing a pension, making substantial contributions, undertaking a limited recourse borrowing arrangement or undertaking their estate planning.
- How often must an SMSF’s deed be upgraded?An up-to-date deed is necessary to ensure compliance with the latest laws. It is also best practice for advisers to use up-to-date deeds for ease of administration of their clients’ funds and to maximise flexibility for their clients.
- Does DBA’s deed allow the trustee to borrow under a limited recourse borrowing arrangement?Yes. DBA’s deed allows the trustee of the fund to borrow in accordance with section 67A of the Superannuation Industry (Supervision) Act 1993 (Cth).Note, many deeds, issued prior to mid-2010, have insufficient powers which would not be accepted by banks who typically review all SMSF deeds before lending. All SMSF trustees proposing to borrow should have their deed thoroughly reviewed and upgraded if necessary as lenders typically closely scrutinise all prior deeds.
- How does succession to the ‘trustee’ role operate under DBA’s deed?DBA’s SMSF deed has been carefully drafted to maximise succession planning opportunities.The deed allows a member’s Legal Personal Representative (‘LPR’) to stand in as a trustee (or director of the corporate trustee) under DBA’s constitution if the member has died, is under a legal disability or, eg, has moved overseas and has appointed their LPR via an enduring power of attorney in order to ensure the fund remains a resident fund. These strategies are not always permitted under some deeds.If the fund has individual trustees, the deed also allows a member to nominate a ‘successor trustee’ during their lifetime to step in on their death, which helps to minimise the uncertainty of who will take control of their fund after the death. Note, if the fund has a corporate trustee, any nomination of a ‘successor director’ must be provided for in that company’s constitution (DBA’s company constitution allows this nomination to be made: Click here for more information on DBA’s company).
- Does DBA’s deed allow for the new types of pensions?Yes. The deed allows account-based pensions and transition to retirement income streams (‘TRIS’) to be paid.The deed also facilitates a TRIS becoming an account-based pension once the member has satisfied a condition of release (eg, retirement or attaining 65 years).
- Does DBA’s deed allow for a binding death benefit nomination (‘BDBN’)?Yes. DBA deeds post-June 1999 enable members to make BDBNs. Please refer to the BDBN information on our website for further information.
- Does DBA’s deed come with a product disclosure statement (‘PDS’)?Yes. All DBA deeds (both new and varied) come with a personalised PDS for each Member at no extra cost. Please refer to the PDS information on our website for further information.We are aware of many deed suppliers who rely on an exemption in the Corporations Act 2001 (Cth) to avoid supplying a PDS or do not provide a separate PDS to the deed. However, this exemption is difficult to satisfy and raises significant compliance risks. Further, the PDS assists advisers in informing their clients about the features of an SMSF and is an invaluable educational tool and therefore minimises the risk of adviser liability.