Home Finance Superannuation Trust Deed: the First Step of the Set-Up Process

Superannuation Trust Deed: the First Step of the Set-Up Process

SMSF or the self managed super fund is a special type of trust established to provide financial benefits to members in retirement as well to their beneficiaries. The trustees control all the investments made in the name of the superannuation fund and they have the freedom to tailor the fund according to their individual requirements and needs. The SMSF must be set up in accordance with the trust and super laws. Furthermore, it must include trustees, assets as well as identifiable beneficiaries.

Superannuation Trust Deed

The first and most important part of the set-up process is the superannuation trust deed. It is a legal document which actually establishes the SMSF and provides all the rules for operating the fund. The Superannuation Industry Supervision Act (SISA) requires that the governing rules set up by the trust deed establish the fund with the primary purpose of providing provision or old-age pension for the trustees. Furthermore, the deed must ensure that the SMSF will be operated following the superannuation laws.

The superannuation trust deed includes an establishment date and a clear definition for all the relevant laws. It also provides information about the process of becoming a member as well as important details on how all the proceedings, such as voting or investing, should be conducted.

The deed must also provide information about the investment power of the trustees. This includes all the rules and terms about who can actually become a trustee and under which conditions. It should set up the rules for the payment of benefits as well as the terms concerning the acceptance of contributions. The deed should also provide details on how and under what conditions the super fund can be wound up.

As the most important legal document that forms the governing rules, the trust deed must be prepared by qualified professionals that will make sure the SMSF is a complying fund that operates in accordance with the superannuation laws. Moreover, the deed must be signed and dated by all the trustees. It should also be executed following the state and territory laws. For the proper functioning of the super fund, it is necessary for the deed to be regularly reviewed and updated.

An efficient and well-established superannuation trust deed ensures that the trustees enjoy all the advantages that come with SMSF. These include great investment options, a freedom to control and organize their funds such as the option to make a transition of retirement pensions, as well as the opportunity to purchase or borrow property and other assets. It really has a vital role when it comes to maximizing the potential of the super fund and building a safe future for you and your family.