On 1 July 2017, significant changes came into force and many more are proposed as a result of the recent federal budget. So if you haven’t already reviewed your SMSF Deed, do you really need to?
The answer is YES – all SMSF Deeds should be reviewed to ensure that they are up to date and reflective of the changes that have occurred. SMSF Trustees should really aim to review their SMSF Deeds at least annually as well as when there are significant changes in:
- Their financial or personal circumstances; and
- The law governing SMSFs.
Seeking advice from a SMSF specialist lawyer and accountant will certainly offer peace of mind to SMSF Trustees and ensure that the SMSF continues to be compliant and effective. It is the responsibility of the SMSF’s Trustee to review the Deed before making any decisions or taking any actions so ensuring the Deed is valid and current is an integral part of being an SMSF Trustee.
There are a broad variety of issues that need to be reviewed in an SMSF Deed including:
- Whether an SMSF member can roll back funds in their retirement pension account to their accumulation phase;
- The ability to create various death benefit instructions. This is so death benefit recipients do not exceed their transfer balance cap when receiving a death benefit;
- The ability to roll over a death benefit without losing its death benefit status.
- Trustees must not accept contributions in certain circumstances and refund contributions that should not have been accepted;
- Altering the terms and conditions of an income stream. This will allow reversionary beneficiary nominations or will allow changes to the nomination of a reversionary pensioner without stopping the pension; and
- Determining whether to retain or cease transition to retirement income streams.
Importantly, this list is not exhaustive and there are many other issues that should be examined when reviewing the SMSF Deed including for example, for older Deeds (or poorly drafted Deeds) there may be other issues that need attention or consideration.
A review of the Deed by a qualified SMSF specialist lawyer would bring any such issues to light. Failure of SMSF Trustees to ensure adequate review of the Deed may mean that the Deed does not permit certain actions and in a worst case scenario, negative financial consequences from issues of non-compliance may occur, for example.
To book your post 1 July 2017 SMSF check-up, contact us today.
With a background in aged care management, Rebecca brings hands on experience and insight into our elder law and aged services areas as well as a thorough understanding of complex estate planning issues and disputes.