SMSF laws change. Old deeds are dangerous. They contain irrelevant clauses. You risk using an illegal power. An old SMSF makes it harder for your accountant, financial planner and auditor to look after your SMSF.
SMSF deeds should be permissive, not regimented. Permissive deeds allow you to do whatever you like. This is subject to the superannuation and trust laws.
In contrast, regimented deeds try and ‘help’ the trustee. They mention all the legal restrictions into the SMSF deed. Often there is huge unnecessary detail. Often the regimented deed quotes huge slaps of the legislation in the SMSF trust deed. Sadly, every time the laws change, you need to update a regimented deed.
Permissive SMSF Deeds allow greater flexibility. They adapt to changes with minimal adjustment. The main difference is clear. Regimented SMSF deeds require almost constant monitoring, review and updating. This is to keep pace with changes to the legislation and case law. At Legal Consolidated, we draft permissive deeds. They need less updating.
– 1999 – ‘Excluded Funds’ became ‘Self-Managed Super Funds’, preservation & in-house assets SMSF update
– 2007 – ‘Simpler Super’
Now these are the 15 changes to SMSF Deeds required:
The SMSF update is required to give maximum flexibility for your accountant and adviser.
There is no risk of resettlement
Resettlement of an SMSF occurs when a new ‘trust estate’ is created out of an old trust. When this occurs, the trustee is considered to have disposed of the assets in the old trust. Accordingly, a new trust is created. This results in significant negative tax implications.
However, there is no risk of resettlement under the High Court authority of Commercial Nominees (2010). Our letter of advice, expressly states there is no resettlement. This is for your Financial Adviser and Accountants due diligence files.
Updating your SMSF Deed through Legal Consolidated does not result in the resettlement of your SMSF. We retain those parts of the old Deed required to not affect a resettlement. This is based on both the legislation and previous court decisions. Start building now.
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