Smsf Trustees Must Know Their Trust Deed

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One of the many legacies we, as a nation, inherited from our British ancestors was their legal system and although over time some of it has gained an Australian flavor, it still sits squarely on the foundations of English common law. One of the instruments that developed over hundreds of years in England, and is also part of our system, is the legal entity known as a "trust". The duties and powers of trustees have been adjusted and changed over time both by Court decisions and legislation. This all becomes relevant when considering the workings of a superannuation fund, and the responsibility that lies with the trustee to manage it well.

When it comes to superannuation funds, we put a lot of trust in strangers to manage this for us. Especially for those people who have self managed funds. A DIY Super fund trustee has a heavy responsibility to the fund members to increase their wealth, while at the same time, protecting their investments. Trustees have a huge responsibility when if comes to managing their own finds. The consequences of failing to discharge their duty can affect their financial well-being.

A trustee must have a working knowledge of the contents of a trust deed, otherwise he will fail manage the fund properly for his client. The advisor will use a legal instrument right from the start when setting up a fund. Combined with superannuation legislation, this gives the trustee the parameters to work within on behalf of the fund.

In the past, trust deeds were complicated legal documents without logical structure that made it difficult to find information. These days trust deeds are easy to read and follow. This makes them a great resource for the trustee. This is important because, under the "Duty of Loyalty", the trustee must not act outside of the trust deed and relevant laws without a court order. A trustee must set aside any personal views and act only in the best interests of the beneficiaries.

Even if financial and super professionals are advising the trustee, the ultimate responsibility for the performance of the fund rests with the trustee. Reading and understanding the trust deed, and more importantly, following it in any operational transactions or dealings, is a vital part of the responsibility of being a trustee. SMSF trustees who are in any doubt about the workings of their trust deed should seek the assistance of their superannuation advisers.

About the Author:
SMSF Brisbane http://smsfbrisbane.com.au/ can assist the trustee in the day-to-day running of the fund but ultimately the trustee of a DIY Super Brisbane fund is responsible for its performance.



Article Originally Published On: http://www.articlesnatch.com


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