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Create the trust and trust deed

A trust requires trustees, assets and beneficiaries. Trust deed sets out the rules, establishing and operating the fund.

Last updated 15 February 2018

A trust is an arrangement where a person or company (the trustee) holds assets (trust property) in trust for the benefit of others (the beneficiaries). A super fund is a special type of trust, set up and maintained for the sole purpose of providing retirement benefits to its members (the beneficiaries).

To create a trust, you need:

  • trustees or directors of a corporate trustee
  • governing rules (a trust deed)
  • assets (an initial nominal consideration to give legal effect to the trust can be used, for example, $10 attached to the trust deed)
  • identifiable beneficiaries (members).

Trust deed

A trust deed is a legal document that sets out the rules for establishing and operating your fund. It includes such things as the fund’s objectives, who can be a member and whether benefits can be paid as a lump sum or income stream. The trust deed and super laws together form the fund’s governing rules.

The trust deed must be:

  • prepared by someone competent to do so as it's a legal document
  • signed and dated by all trustees
  • properly executed according to state or territory laws
  • regularly reviewed, and updated as necessary.

Assets

To establish your fund, assets must be set aside for the benefit of members.

If a rollover, transfer or contribution is expected in the near future, a nominal amount (for example, $10) can be held with the trust deed. This amount is regarded as a contribution and must be allocated to a member.

If a member can't contribute to the SMSF (for example, they are over 65 or don't meet the work test), an administrative discretion is automatically applied to allow a nominal contribution for the member. The amount must be allocated to the member, solely for the purpose of registering the SMSF.

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