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SMSF Succession Planning

Click here for online SMSF Core Course training – Members’ estate and SMSF succession planning

SMSF succession services

DBA Lawyers offers a range of SMSF succession services which are tailored to deliver sound succession outcomes that are strategically linked to a member’s personal estate plans.

SMSF Succession Planning services

Make an appointment with one of our expert lawyers to discuss your SMSF succession planning needs or a general SMSF diagnostic.

Provides documentation for a tailored binding death benefit nomination.

Please note that DBA Lawyers’ SMSF documentation includes useful template form for less complex nominations.

BDBN disclaimer documentation

Provides documentation to disclaim any entitlement any present or future entitlement to a death benefit arising under a BDBN.
Hardwired SMSF deed and tailored succession documents

DBA Lawyers can prepare tailored SMSF and pension documents, including special deeds of variation to provide for restricted non-commutable pensions and other relevant succession documents, to achieve personalised solutions for your clients.
Member representative appointment

Provides documentation enabling a member to appoint a trusted person as their Member Representative to act on their behalf in respect of their member rights and entitlements. Having such an appointment may be highly desirable in the event that the member is unable to act, for example, due to ill-health or loss of capacity. A duly appointed Member Representative can exercise all of a member’s rights and entitlements under the governing rules of the fund, such as exercising the member’s ‘appointor power’ to change the fund’s trustee, or remaking the member’s binding death benefit nomination.
Conditional member admission

Provides documentation for new member(s) to be admitted to an SMSF subject to agreed conditions for cessation of membership.
Enduring power of attorney consultation services
– Click here for more information
DBA Lawyers does not prepare enduring power of attorney (‘EPoA’) documentation, however, we provide assistance in reviewing and settling the wording in EPoAs that involve SMSFs and related matters. For example, we can work with your estate planning lawyer to ensure that your EPoA is appropriately drafted for SMSF succession planning and/or overseas residency purposes.
Successor director appointment

Provides documentation for a nominated person to be automatically appointed as a director of a company upon the loss of capacity or death of the appointing director.

Please note that the DBA Lawyers’ company constitution includes a standard form for successor director appointments.

Why do you need an SMSF succession plan?

Though it is often overlooked, succession planning is a crucial aspect of successfully operating an SMSF. Every SMSF member of an SMSF should develop, implement and regularly review a personal succession plan to help ensure that there is a smooth process in place for succession to control of the fund and other succession arrangements appropriate for their individual circumstances. This may include a binding death benefit nomination (‘BDBN’), automatically reversionary pensions or other strategies.

Broadly SMSF succession planning aims to deliver the following outcomes:

  • that the right people receive the intended proportion of SMSF money and assets at the right time; and
  • that the right people have control of the SMSF at the right time (eg, on loss of capacity or death) to ensure that benefits are paid as intended.

Right Assets - RIght Person - Right Time

An optimal SMSF succession plan should provide for these outcomes in a timely fashion, with minimal uncertainty and in as tax efficient manner as possible. However, it should also be recognised that trade-offs may need to be considered, as it would usually be considered preferable that the ‘right’ people receive a benefit and pay tax, rather than the ‘wrong’ people receiving a benefit in a tax efficient manner (eg, without proper planning, a former spouse may end up receiving death benefits when this was not intended).

Accordingly, there is no easy ‘one size fits all solution’ for SMSF succession. However, SMSF succession planning should ideally consider matters such as the following:

  • determine the person(s) or corporate entity who will occupy the office of trustee upon loss of capacity or death (we strongly recommend a sole purpose corporate trustee — click here for more information on the advantages of a DBA Lawyers company);
  • in relation to a corporate trustee, determine who the directors of the SMSF trustee company will be (ie, who will have control of the company) upon loss of capacity or death;
  • ensure that the SMSF can continue to meet the definition of an SMSF under s 17A of the Superannuation Industry (Supervision) Act 1993 (Cth) (‘SISA’) with respect to future developments such as the loss of capacity or death of members, or minor members reaching age 18;
  • determine what each member’s wishes are for their superannuation benefits;
  • determine to what extent each member’s wishes should be ‘bedded down’ through the use of an automatically reversionary pension, BDBN or a specially tailored deed;
  • determine the tax profile of anticipated benefits payments; and
  • ensure the SMSF succession plan is consistent with the person’s will, power of attorney and other personal estate plans.

Many people have outdated, inappropriate or no succession plans in place for their SMSF which may result in considerable uncertainty arising in the future, with the control of the fund and the ultimate fate of their member benefit put in jeopardy.

SMSF deed

DBA Lawyer’s SMSF deed has been prepared with a view to smooth SMSF succession planning. In particular, it provides the flexibility for:

  • a person’s executor to become a trustee/director in place of a deceased member;
  • a person’s attorney acting under an Enduring Power of Attorney to become a trustee/director in place of a member when he or she is in a coma and is legally incapable of acting; and
  • a member’s interests to be managed by their executor/attorney following their death/incapacity. Typically, the SMSF members wield ultimate control and can hire and fire a trustee. Thus it is important the governing rules provide protection for member’s if they become incapable or die.
  • Many other valued-added strategies that other SMSF deeds do not provide.

Here are some articles that explain some of the strategic reasons why our SMSF documents are so highly regarded:

Click here to order a new SMSF or click here to update the governing rules of an existing SMSF.

Company constitution

DBA Lawyers’ company constitution has also been prepared with a view to smooth succession planning. In particular, it provides the flexibility for:

  • an executor or attorney acting under an Enduring Power of Attorney to become a director and still remain compliant with the trustee/member rules;
  • a mechanism whereby voting can be managed by giving one or more a greater vote and/or right of veto, rather than being based on the number of directors or shares held;
  • successor directors and value-added template — a director can appoint one or more successor directors to step in as directors on the incapacity or death of the director. A template successor director form is provided with every company for no extra charge. Few to no other companies allow for successor directors or provide the documents to implement them; and
  • Many other valued-added strategies that other constitutions do not provide.

We believe we have the best company constitution and related company documents in Australia especially for SMSFs and we refer you to following articles for further information:

Click here to order a new company or click here to update the constitution of an existing company.

SMSF documentation

DBA Lawyers’ SMSF and company succession service is the best in its class and the documentation we provide offers numerous advantages over other suppliers in relation to SMSF succession planning.

Our service standard gives you peace of mind that expert SMSF lawyers who handle SMSF and succession planning matters on a daily basis will prepare documents that provide a secure foundation for your SMSF succession plans.

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