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About the Product
The Leading Member SMSF is an SMSF that focuses on the succession of an SMSF to lineal descendants of the Leading member and the passing of superannuation benefits to lineal descendants, via pensions or lump sum distributions.
This upgrade RPA kit is packaged with an upgrade to the Leading Member SMSF Deed and the added benefit of the Leading Member SMSF Special Purpose Corporate Trustee. This kit also includes template strategy text for use in client file notes, advice documents and the likes.
Prior to proceeding, you should determine that the existing Trust Deed allows the trustee to vary the deed (as defined in the Substituted Governing Rules of an existing fund). The rule under which this is noted will be referenced in the assembled documentation.
► Provided under Strategist membership.
► The master document has been signed off by LY Legal and is congruent with Australian law.
General Information
The Leading Member controls the Trusteeship of the Fund as well as who the members of the Fund are (generally lineal) and what happens in the event of divorce, dementia or bankruptcy. The Leading Member has the power to deem a person, such as their spouse, as lineal.
One of the most important things for a high-net-worth client with sizeable SMSF member balances, is to provide asset protection and pass their wealth onto their lineal descendants.
Benefits
- Keeping the Family SMSF Wealth within the lineal descendants just as the English Royal Family does.
- Easy to read and understand.
- Filled with fantastic strategies.
- Written by Australia’s foremost legal, technical and strategic expert, Grant Abbott.
- Newly-authored and covers all recent legislation changes.
- A legacy product dating 20 years or more.
- Signed off by LY Legal.
- Younger members can access older members’ imputation credits to ensure they are not lost.
- Benefits of LYD Leading Member Special Purpose SMSF Corporate Trustee
- Flexible and matches the requirements of the Corporations Act 2001 for a special purpose corporate trustee.
- The Leading Member of the Fund is automatically appointed as chair.
- One Director – one vote rule with Leading Member veto power.
- The Leading Member can appoint or remove Directors.
- Only ordinary classes of shares offered.
- On death of a member, the Board of Directors must appoint the deceased member’s LPR as a Director or lose its trusteeship.
- On death, only the deceased member’s LPR as a Director has a vote in relation to the payment of the deceased member’s death benefits.
- All of the shares of the company are held by the Leading Member. On the death of the Leading Member, these shares are cancelled and new shares issued to the incoming Leading Member.
Frequently Asked Legal Questions
How does a Leading Member SMSF differ from a standard SMSF?
The Leading Member SMSF is based on the LYD SMSF with the added benefit of limiting Trustees and Members to lineal descendants via the use of a Leading Member. A Leading Member controls the Fund and succession planning for the Leading Member is catered for in the LYD Leading Member SMSF.
Can my SMSF be upgraded to a Leading Member SMSF?
Yes, provided your existing SMSF Trust Deed allows for the substitution of governing rules. There are also no issues in relation to resettlement. You will need to plan for who is the Leading Member plus succession in the Leading Membership role. However, if you would like legal advice to that effect, contact our legal team – info@abbottmourly.com.au
What are the benefits of the LYD Leading Member Special Purpose SMSF Corporate Trustee?
- Flexible and matches the requirements of the Corporations Act 2001 for a special purpose corporate trustee;
- The Leading Member of the Fund is automatically appointed as chair;
- One Director – one vote rule with Leading Member veto power;
- The Leading Member can appoint or remove Directors;
- Only ordinary class of shares offered;
- On death of a member, the Board of Directors must appoint the deceased member’s LPR as a Director or lose its trusteeship;
- On death, only the deceased member’s LPR as a Director has a vote in relation to the payment of the deceased member’s death benefits; and
- All of the shares of the company are held by the Leading Member. On the death of the Leading Member, these shares are cancelled and new shares issued to the incoming Leading Member.
How long does this document take to assemble?
Depending on the complexity of the data, this document should take approximately 15-30 secs to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .
Is this document a legal document?
All master documents have been signed off by LY Legal lawyers. Tony Anamourlis of LY Legal advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LYD platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LYD platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”
However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by LY Legal.
The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:
“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”
Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.
Is the document easy to read?
All LYD products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lyd.com.au.
What lawyers sign off on the LYD documents?
All LYD documents are prepared and signed off by LY Legal.
Are the LYD documents reviewed regularly?
All LYD documents form part of the LYD internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.