SMSF trustees and their beneficiaries should be certain of the location of the fund’s trust deed and also what it contains in the event it is misplaced or lost, according to an SMSF lawyer.
Cooper Grace Ward partner Scott Hay-Bartlem said two legal cases from last year emphasised the importance of knowing what a trust document states as much as knowing its location.
“In the case of Jowill Nominees v Cooper ([2021] (SASC 76) there was a lost family trust deed but the parties were all in agreement,” Hay-Bartlem said at his firm’s recent Annual Adviser Conference.
“There was good evidence there was in fact a family trust deed, as well as a summary of its terms and the family’s lawyer could produce his own deed that was done at the same time from the same place.
“The court was happy that the rules of the deed were the rules that will apply and said it knew that while the family trust deed was lost, it was happy to order that the deed that was produced was the family trust deed.
“In the case of Mantovani v Vanta ([2021] (VSC 771) – where the family was having a massive fight – there was also a lost family trust deed.
“The court also recognised there was a trust deed, but the mother of the family had transferred an inheritance in there and since died and was uncertain about what was happening and claimed the family could not tell the court what would go ahead under the deed.
“So, with no evidence of a trust deed, the court said the trust deed had failed and all the money in the trust fell into the mother’s estate and the beneficiaries of her estate get the money.
“So, two similar circumstances on the surface, but very different results which reinforce the importance of knowing what a trust deed says and having it and being able to find it.”
