September 30, 2010

What is the best self managed super fund SMSF trust deed?

By Kris Kitto

Not all SMSF trust deeds are created equal – which is why if you try searching by yourself on the internet you will find numerous trust deed providers with a range of prices.

When it comes to SMSF trust deeds, it is definitely a case of getting what you pay for.


If you want skip ahead to where I recommend my preferred trust deed provider – you can – however you will miss out on the reasons why a good quality trust deed is so crucial.

You need to select a trust deed that enables you to maximise the potential a SMSF can offer when it comes to building your wealth while protecting you and your family at the same time.

Why is a trust deed of a SMSF so important?

Your SMSF trust deed is probably the most important document in your arsenal when you are trying to build wealth, save tax and protect your assets.

Many SMSF trustees and their advisers (especially your trusty local accountant) are guilty about approaching what you can and can’t do with your SMSF the wrong way.  It is simply not a case of checking whether it is OK under the relevant superannuation and taxation laws.  You need to ensure that your trust deed allows it – if it is not contained in the rules of the fund then you can’t do it.

Even more importantly, if you do something that is contrary to a rule contained in your SMSF trust deed, then you have also breached the the superannuation laws.

Take advantage of unique SMSF strategies

Enough of the scare tactics.  Let’s talk strategy.  If you do not have a good quality and up to date trust deed, you will not be able to take advantage to some of the fantastic strategies that are exclusive available to SMSFs such as:

  • Investment flexibility
  • Ability to borrow to purchase property or other assets
  • Allocation of income flexibility (including non-proportional allocation)
  • Estate planning flexibility and control
  • Transition to retirement pensions
  • Acceptance of ATO co-contributions
  • Flexible voting power
  • Use of reserves
  • Choice of trustee

Best SMSF trust deed providers:

1. Topdocs

The trust deed that I utilise for all my clients – whether for new SMSFs I set up, or existing client I take on where their trust deed requires updating is from Topdocs.

The Topdocs SMSF trust deed has just had a complete overhaul, and unlike many other SMSF trust deeds in the market place is not simply an older trust deed that has attempted to keep pace with changes in superannuation legislation by ‘bolting-on’ additional clauses and rules.

What I like about the Topdocs SMSF trust deed:

  • Topdocs employs specialist SMSF lawyers – many trust deed providers online are simply document re-sellers
  • The Topdocs SMSF trust deed finds the right balance between linking to the SIS legislation, while still providing flexibility that can accommodate minor legislative changes without becoming outdated
  • One of the challenges with SMSFs borrowing to purchase property is that often SMSF trust deeds are not up to standard.  The Topdocs SMSF trust deed expressly enables SMSF trustees to borrow against and register a charge against the title of property as allowed under section 67A of the SIS Act.  This ensures that both the ATO (in the case of an audit) and also the banks solicitors will accept the SMSF trust deed for limited recourse borrowing arrangements without the need for further amendment
  • A unique feature of the Topdocs SMSF trust deed when it comes to estate planning is the inclusion of a ‘Death Benefit Guardian’ which enables a member of the SMSF to appoint someone who will need to authorise any death benefit payment (where an existing binding death benefit nomination or reversionary pension is in place) without that person having the responsibility of becoming a trustee
  • Other SMSF strategies available with the Topdocs deed include:
    • The use of SMS reserves such as investment and contribution reserves
    • Payments of various types of SMSF pensions
    • Conversion of the old (pre-1997) Allocated Pensions to the new Account Based Pensions
    • Stamp duty exemptions for the transfer of commercial / business property from members to the SMSF with nil or nominal Stamp Duty
    • Ability to obtain QROPS status and accept transfers from UK pension schemes
    • Full spectrum of estate planning options including binding  and non-binding death benefit nominations (non-lapsing), reversionary pensions, anti-detriment payments

Now, I could continue to provide a list of other SMSF trust deed suppliers, however I believe you need to look no further.

The Topdocs SMSF trust deed is available to order instantly online via the Superfund Partners Document Portal or by downloading the PDF order form here.

If you have any questions or comments in regards to selecting your SMSF trust deed please post them below.