top of page

The Perils of a Lost Trust Deed: A Cautionary Tale and Solutions



In the labyrinthine world of finance, trust deeds serve as the bedrock of stability for both Self-Managed Super Funds (SMSFs) and discretionary trusts. But what happens when this crucial document goes missing? The consequences can be catastrophic, leading to financial ruin, legal complications, and a Pandora's box of troubles that can turn your investment dreams into nightmares. In this article, we delve into a real-life case study and outline the five major dangers of losing a trust deed. Plus, we introduce two foolproof solutions from Abbott & Mourly Lawyers to safeguard your financial future.


Case Study

Meet Sarah, a 45-year-old entrepreneur who had set up an SMSF to secure her retirement. Sarah was meticulous in her planning but overlooked the safekeeping of her trust deed. When it came time to make significant changes to her fund, she discovered that her trust deed was nowhere to be found. The absence of this vital document led her into a quagmire of legal and financial troubles, including hefty fines and a frozen fund, jeopardizing her retirement plans.


Five Dangers and Problems

Legal Invalidity: Without a trust deed, the trust itself may be considered legally invalid, putting all assets and transactions at risk.


Tax Penalties: SMSFs without a proper trust deed can lose their complying status, resulting in severe tax penalties that can eat into the fund's assets.


Asset Freezing: Financial institutions may freeze the trust's assets until a new deed is established, causing liquidity issues and investment losses.


Beneficiary Disputes: In the case of discretionary trusts, the absence of a trust deed can lead to disputes among beneficiaries, as there are no guidelines for asset distribution.


Legal Costs: The process of reconstructing a lost deed or establishing a new one involves significant legal fees and time, further exacerbating financial woes.


Solutions from Abbott & Mourly Lawyers

The good news is that all is not lost. Abbott & Mourly Lawyers offer two robust solutions to mitigate the risks associated with a lost trust deed. Whether you're dealing with an SMSF or a discretionary trust, their legal experts can guide you through the process of either reconstructing the lost deed or establishing a new one, ensuring compliance and peace of mind.


To learn more about these solutions, contact Nush at nush@abbottmourly.com.au.


Don't let a lost trust deed derail your financial plans. Take action today to secure your tomorrow.

115 views0 comments
bottom of page