If you have your own SMSF then I am sure you are very aware that superannuation legislation is constantly changing. The government loves tinkering with the rules which makes keeping your SMSF deed up to date extremely important. Often trustees don’t understand how the trust deed and superannuation legislation work together. In short, the trust deed rules stipulate what you are allowed to do whereas the superannuation legislation outlines what you cannot do. Let’s take a look at why we need to keep our deed current.

Have you ever read your SMSF deed? Not skimmed it but truly read the entire document? I can guarantee a large number of SMSF trustees have not done this. Ever! As soon as you have finished reading this I urge you to grab it, sit down with a cup of tea and read it. You may find yourself very concerned that you are doing something with your super fund that the deed actually doesn’t allow you to do. Or you may have put something in place for the future that, come the time, will actually be useless because of the rules of your deed. Further still, you may actually not have understood your deed at all and wish to have a professional review by a SMSF accountant.

Let’s take a look at some examples of where it can go wrong:

 You are in pension phase and have made it reversionary to your spouse in the event of your passing. A clause in your deed does not allow the fund to pay reversionary pensions.
 You drew a lump sum benefit from your fund. Your deed only allows the payment of pensions.
 You have updated your SMSF deed regularly since you commenced your super fund. Your deed actually doesn’t recognise deed updates.
 You are 66 years old but decide you don’t want to commence a pension just yet. Your deed stipulates that all members must commence a pension on their 65th birthday.

These are just a very small handful of some of the issues that may arise by having an outdated deed. But the good news is they can usually always be fixed with some legal assistance quickly and cost effectively.

So to avoid breaching the SIS Act and Regulations be sure to regularly check that your deed is current. It is a small expense to pay for something so important.

Now put down your phone or turn off your computer and go and read your SMSF trust deed. Get in touch with us here if you would like us to review your deed for you.

 

This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.