SMSF Lost Deed Service

Options – SMSF lost deed service

A. SMSF Deed update where there is a lost prior deed

This service is offered in conjunction with our SMSF deed update service. When you order an SMSF deed update you can notify us that you cannot provide the most recent deed (ie, it’s a ‘lost deed’) and we can provide new governing rules and add additional parties to the deed to minimise future risk.

A trustee might choose this option as it might bind the other signatories to the agreement that even through there may have been a previous break in the SMSF’s chain of documents, all parties are content to move forward with the current trustee and the new governing rules. This approach might reduce the ability of the other signatories from contesting this point later on, however it does not completely remove the possibility, nor prevent other third parties contesting the matter later on (eg, beneficiaries who did not sign the deed in a death benefits dispute).

This option is relevant where, despite exhaustive searches, no evidence of the lost deed has been located. If there is evidence relating to the lost deed, then option B can be considered.

B. Deed of confirmation to confirm a lost deed

This service is appropriate where there is a lost deed but there may be evidence relating to the deed that you would like confirmed, eg, you have a standard template SMSF deed or governing rules supplied by the supplier who supplied the lost deed around the time the lost deed was supplied.

The deed of confirmation, among other things, confirms that the trustee, members and any other relevant parties agree that they are bound by the deed of confirmation. Appropriate evidence is also gathered by the trustees, members and any other parties to the prior deeds to support the deed document trail. Our lawyers prepare relevant documents to appropriately record this evidence.

What’s the importance of prior deeds?

Almost all SMSF strategies and arrangements rely on a ‘firm foundation’ being the trust deed and governing rules. Like a house, unless you have a firm foundation, the house may prove shaky and be blown down by rough weather. Having a robust deed is very important for many SMSF strategies including pensions, binding death benefit nominations, and determinations of who eventually gets control of the fund on death, separation of a relationship, and in a dispute. Thus, it is important to ensure the SMSF’s governing rules provide a firm foundation for every SMSF.

Note that an SMSF’s governing rules also require all prior deeds, rules, and changes of trustee to be validly prepared, witnessed, executed, and, if necessary, stamped, in compliance with prior variation powers, relevant consents, and appropriate legal formalities. All these formalities must have been complied with in the document trail otherwise the SMSF’s governing rules may be invalid and ineffective.

We also offer an SMSF Deed History Review – click here.

Trustees are required to comply with the trust deed or be exposed to risk

Broadly, an SMSF is a type of trust that, like all trusts, is ‘run’ by its trustee. One of the most fundamental responsibilities of a trustee is to be familiar with and comply with the terms of the trust, as varied from time to time.

The trust deed is the document that sets out the terms of that trust (and is also sometimes referred to as the governing rules). Therefore, without a trust deed, an SMSF trustee will be exposed to considerable risk of penalties and legal risks. Numerous third parties will want to review the deed including accountants, financial advisers, auditors, lawyers, the ATO and banks, investment bodies and potentially most important of all beneficiaries upon a death benefit or other legal dispute.

How to track down a lost deed

Where there is a lost deed, exhaustive searches should be made to find it or gather any evidence that may relate to the existence and contents of the prior deed. Some suggested ways to locate a lost deed include:

• contact all prior and current accountants, financial advisers, auditors, lawyers, the ATO, revenue offices, banks and investment bodies that may have been provided a copy;
• contact the deed supplier to determine whether they have a copy of the deed or the standard template deed that would have been supplied at the relevant time; and
• check every place where documents may have been stored over the years (including any filing cabinet, safe, bank deposit box, etc).

Best to get the court’s approval

Ideally, an approach should be made to the relevant Supreme Court seeking a declaration that the trustees can continue to administer the fund on the basis of the available document trail. However practically many SMSF trustees are reluctant to spend the considerable time, money and effort required to approach the court and endure the stress that this entails.

DBA Lawyers can advise on options and assist with documents

We can provide advice on the various options and assist with any written advice or documents that you may require.

Our lawyers are best placed to tailor a solution that best suits your instructions and risk appetite to achieve your preferred outcome.

Related articles

For further reading:

• What to do if a company’s constitution is lost?
• DBA Lawyers’ lost SMSF deed service
• Honey, I lost the deed! A 1976 deed can’t be found … trust fails as a result!
• Dealing with a lost SMSF trust deed
• Discretionary trusts – variations and issues
• Re Owies Family Trust [2020] VSC 716