SMSF trust deeds should continue to be made and executed on paper, despite a number of recent electronic document and signing changes, to ensure they usable and applicable in any jurisdiction, an SMSF lawyer has said.
DBA Lawyers special counsel Bryce Figot said while companies, including corporate SMSFs, can now make deeds electronically as a result of changes to the Corporations Act 2001 contained in the Treasury Laws Amendment (2021 Measures No 1) Act 2021, SMSFs should stick with paper documents for the time being.
“We don’t recommend relying on this [law change] yet because sometimes with a new law it is difficult to work out how it will apply,” Figot said during a webinar late last week.
“We saw that back in 2018 in New South Wales where the law said we could make a deed electronically, but there was a deficiency with electronic witnessing which meant that was not the case.”
Over the past 18 months, as part of COVID-19 relief measures, laws had been amended in NSW, Victoria and Queensland, allowing for electronic signing and witnessing of individual SMSFs, but the NSW amendments for electronic witnessing will expire on 1 January 2022, he noted.
He added SMSF trustees in jurisdictions where a deed is required that was not subject to the laws of Victoria, NSW or Queensland should “do it the old‐fashioned way” and suggested further inclusions to avoid problems with those unfamiliar with deed requirements.
“What everyone should do is print the entire document even if only one or two pages are being signed or dated,” he said.
“Also date it. Even though this has never been a requirement for validity, do it anyway because by the time you have had a debate with a clerk at a bank at the lack of date, you have already lost.
“Have witnesses who are not party to the deed even though there is no requirement for this in Victoria, and sometimes there is no requirement for this in other jurisdictions, but do it anyway as it’s the path of least resistance.
“Ensure when individuals sign, the deed has the words ‘signed, sealed and delivered’ as in certain jurisdictions this does not matter, but in other jurisdictions this is critical.
“If you follow the above, you will be fine regardless of which jurisdiction’s laws apply.”
