The dangers of downloading SMSF documents

January 13, 2014

Concerns are growing with the increased commoditisation of the SMSF industry and our usage of cheap generic SMSF documents available on the internet.

It’s becoming easy and cost-effective to purchase important financial and legal documents needed to establish new SMSFs, including documents for borrowing to invest in property. But these are serious legal documents that are being mass produced, and although lawyers have obviously helped to design these, many advisors have growing concerns.

There is a concern of oversimplifying SMSFs from a legal perspective rather than relying on professional legal advice, particularly in the instances of borrowing to invest in property. There is no doubt that when borrowing to buy a property outside of super people gain the advice of a lawyer. However, inside of super, many are trusting their financial advisor, (who may be swayed by the cheaper document solutions) rather than gaining separate legal advice.

The most important issue is ensuring the trust deed is read and understood, unfortunately however most trustees will only skim read and in most cases do not have the knowledge or skills to know of any changes needed.

Most trustees will trust their financial advisors recommendations which may include trust deeds that are the lower cost web based documents in order to make a SMSF viable for the client. A lower initial cost of a SMSF set up may be appealing to the client but when future changes are required the deed may need to be changed and updated at a further cost. Most of these lower cost deeds are also for individual trustees. The importance of achieving the correct set up with professional advice becomes apparent over time.

Leenane Templeton generally recommends that an SMSF have a corporate trustee rather than individual trustees. The one downside of a corporate trustee is the cost of establishing the company. However, there are longer-term benefits of having a company which outweigh the up-front cost. These benefits can be seen here http://self-managedsuperfund.com.au/setting-up-a-self-managed-super-fund/corporate-trustee/

Expert advice to review SMSF documents

Leenane Templeton The Self Managed Super Fund Specialists work with one of the industries top law firms and trust deed specialists to provide comprehensive deeds to cope with a wide range of issues and strategies. Due to regular changes in the super rules we also ensure that the trust deeds are automatically updated on an annual basis by our law firm.

The legal ramifications for trustees and the adverse risk of damaging their life savings can be high.

We would be happy to discuss this further with you.

Link http://self-managedsuperfund.com.au/