Lost trust deed – trustee is in their 80s – should it be a cause for panic?

Peter Townsend

Forgetfulness and ageing often seem to go hand in hand. Whether it’s full blown dementia that is getting acres of space in the media these days because the baby-boomer, damn them, have the temerity to live longer than their elders.

These days they expect to live well into their 80s, which is about 15 years more than their parents and nearly twice that of their grandparents. However age brings with it the possibility of three in ten people over age 85 having dementia and almost one in ten over 65 with the same condition.

Of course, that is a worst case scenario, although a real possibility. Forgetfulness can also occur for other reasons, but when it does it can upset the results of careful planning, especially in the financial area. Say your 85-year old father has lost the trust deeds for his self-managed super fund (SMSF), should it be a cause for panic? Maybe doing nothing is a reasonable and thoughtful reaction.

At least that is the view of specialist superannuation lawyer Peter Townsend, principal at Townsends Business and Corporate Lawyers “Doing nothing should not be ruled out immediately as a choice if a trust deed has been lost.”

Townsend emphasised that course of action was not meant to belittle the need to have a physical trust deed, which was in most cases critical when SMSFs wanted to deal with third parties, such as the ATO, the banks, fund managers and stockbrokers.

“But maybe you don’t need to engage with third parties,” he said.

“Maybe they’ve already seen and have a copy of the deed. Banks normally use photocopied documents and if the client sent them the deed several years back, and nothing’s changed, maybe they don’t need to see anything for the time being.

“Same with the ATO. Why would they want to see the deed or have you previously provided the deed to them and maybe you don’t need to produce it?”

He pointed out the life stage of the trust had to be taken into consideration as well when assessing what to do about a lost deed.

“Are we toward the end of the useful life of the trust? Is this a self-managed super fund with one member in his mid-seventies? Maybe he’s in pension phase, is fairly quiet about what he’s doing.”

“So maybe the fund deed’s not going to last for very much longer and you don’t need to do anything about it.

“So that’s the first question you’d ask yourself – can we get away with doing nothing?”