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Documentation, Superannuation

Historical deed amendments need review

deeds amendments

New amendments to older trust deeds need to be carefully considered as previous conditions and changes may render future alterations void.

Amendments to an older trust deed requires careful inspection as minor mistakes or overlooked factors can result in the amendment being classified as void, according to an expert.

Smarter SMSF chief executive Aaron Dunn said the overlooked factors could be very specific, but if not addressed would still be applicable in the present.

“One of the most common things that I see when we get some specific inquiries around amendments is that a deed may have additional parties that may require approval for any amendments to be made,” Dunn said during a webinar today.

He noted older deeds in particular had a requirement that needed an employer sponsor to approve the amendment, but the individual may longer be involved or has passed away and that obstacle could be avoided by referencing the removal of that requirement in future documents.

The failure to make changes to remove an out-of-date requirement or correct a previous error could result in a new amendment being classified as void, as seen in the Re Narumon Pty Ltd case heard in the Queensland Supreme Court in 2018, he said.

“There were seven trust deeds in that circumstance. What the courts did first before anything else is they wanted to see the paper trail, which told them there was a disconnect there, I think after about the third deed,” he said.

“Therefore, if you have a deed that hasn’t connected the dots between the original deed to the first variation and so on and something like a binding death benefit nomination has been created in the third variation and is then found to be void, then any documentation that is in play in respect to that deed will be null and void.

“Look at engaging with a solicitor to ensure that these things can be remedied, where appropriate, and allow for the fund to continue on as smoothly as it can possibly be.”

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