SMSF Trust Deeds

A self managed superannuation fund is a trust, and the deed is its governing document. The superannuation legislation sets what a fund may not do. The deed sets what this particular fund may do. A strategy that is permitted by the law but not by the deed is not available.

Why deeds fall behind

Superannuation law changes frequently, and a deed written to the law of its day can silently stop supporting what the members now want. Deeds written before recent reforms commonly lack provisions for matters that are now routine, and older deeds sometimes contain restrictions their members have long forgotten.

The practical test is not the age of the deed but whether it supports what the trustee is actually doing. A 2008 deed that permits the current strategy is fine. A 2019 deed that does not is not.

What we check

• Death benefit provisions. What nominations the deed accepts, in what form, whether a nomination can be non-lapsing, and what the trustee must do when one is in force.
• Pension provisions. Whether the pensions the fund is paying, and any reversionary arrangements, are actually provided for.
• Trustee appointment and removal. How trustees and directors are appointed and removed, and what happens on death or loss of capacity.
• Borrowing. Whether the deed permits the fund to borrow at all, which matters before any limited recourse arrangement is contemplated.
• Investment powers, including any restrictions narrower than the law requires.
• Amendment power. How the deed may be updated, and whether earlier updates were validly made.
• The chain of documents. Whether the original deed and every subsequent update can actually be produced.

The lost deed problem

Funds regularly cannot produce a complete set of deeds. Because the trustee's powers derive from those documents, gaps are a genuine problem: an auditor may qualify, a lender may decline, and a death benefit decision may be open to challenge. There are steps that can improve the position, and what is appropriate depends on what can be established. It is far easier to deal with while the members are alive.

Updating a deed

An update must be made under the deed's own amendment power and in the manner it requires. Care is needed not to disturb existing pensions or nominations in the process, and an update that inadvertently revokes a binding nomination is a real and avoidable risk.

We prepare the update, the trustee resolutions and consents, and confirm that existing arrangements survive it.

This page is general information. It is not legal, tax or financial advice, and your fund's deed will change the answer.