findmanningham.com.au
AUGUST 2021 | FIND MANNINGHAM
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SMSF Deeds and Legal Advice Should I use a Lawyer? SOLICITOR By David Heasley
A SMSF deed is a bit like insurance. You don’t know how well it protects you until the worst happens. For example, you discover the SMSF deed itself is invalid, or doesn’t comply with legislation. As superannuation and tax laws are constantly changing, SMSF deeds should be reviewed on at least an annual basis and revised as needed, preferably, by lawyers who are SMSF experts. This situation can come about because it has been possible for several years for advisers, such as accountants and financial planners to obtain the use of SMSF and related legal templates in order that the adviser can prepare documents themselves. Typically, the adviser pays a licence fee that permits them to download the template and prepare the documents as compared to paying a law firm to prepare an SMSF deed for a particular client. Generally speaking, the template suppliers do not have any significant technical or legal expertise in respect of drafting documents such as SMSF deeds or other related legal documents. But it was signed off by a Lawyer- Right? Many non-qualified SMSF document suppliers claim that their documents are “signed-off by a lawyer”.
While a reference to “signed off by a lawyer” does not have a fixed meaning, it is meant to give the impression that the document in question was prepared and reviewed by a lawyer who has approved that individual document, and not just the template. Thus, care is required when dealing with such claims. The actual template (for example a SMSF deed) may very well have been prepared by a lawyer, any resulting completed document may not have been. The position is likely to be clearer where the SMSF deed is supplied directly from a law firm and not from an advisor using a template. In this case a lawyer reviews the instructions for each SMSF, and then drafts documents that are appropriate to those instructions. Can I sue the lawyer when it all goes bad? Unfortunately, probably not. Unlike the scenario where a lawyer handles the whole matter, where the work is done by a non – lawyer there may be little or no protection for any badly done or erroneous work. One example (of erroneous work) may be an ineffective binding death benefit nomination (BDBN) where the SMSF deed has not been varied correctly.
In these instances there is unlikely to be professional indemnity insurance available to an adviser who prepares the invalid deed, as a non-qualified person is not legally authorised to prepare a legal document for a client. In fact, most professional indemnity insurance for advisers (other than lawyers) also excludes cover for services that a lawyer must perform. Advisers and end-users should therefore not assume that professional indemnity insurance is available. Further, some non-qualified suppliers may have no insurance cover at all, leaving the only option for recovery being to sue the advisor. In the cases the money saved by not involving a lawyer (as competent advisors will do) may prove to be expensive indeed.
David Heasley Principal Solicitor HEASLEY LAWYERS www.heasleylawyers.com.au 0408 611 834 AUGUST 2021 | FIND MANNINGHAM
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