SMSF Alliance principal David Busoli told SMSF Adviser that despite demand from clients, the group was erring on the side of caution by retaining wet signatures on formal SMSF documents to avoid ambiguity in financial services law around the use of e-signatures.
“Clients prefer e-signatures because they’re easy, but we prefer to do things that are correct — we use them to sign financials and minutes, but we will not use them for signatures on deeds or anywhere where a witness is required,” he said.
“Our view is that there is no test case on this and we have no intention to put any of our clients in a position where they are the test case.”
Disagreements have abounded in the legal fraternity in recent years around whether documents including SMSF deeds need to be physical rather than electronic, and contain original signatures in order to be compliant with section 127 of the Corporations Act.
Given the amount of recent litigation challenging the validity of SMSF death benefit payments in particular, Mr Busoli said it was only a matter of time before a test case around e-signatures within SMSF documents appeared before the courts.
“When there is no dispute, things go through to the keeper, but where there is a dispute, clever lawyers will be looking at ways of attacking the situation and this is one particular avenue,” he said.
“They would say that it’s not a valid deed, it’s potentially not a valid trust, that documents may have not been witnessed properly or that they haven’t been witnessed.
“Whether or not such a case would be successful remains to be seen, but we would like to see that case involve someone other than our clients.”
In an era where elder abuse is an increasing issue, physical witnessing of important documents like wills and deeds by an independent person is still the best option.
yes witnessing seems strange. Not to point out the obvious but when witnessing a wet signature you are supposed to actually be there. But who witnesses the witness? So in actual fact there is no difference between witnessing a wet signature and witnessing an electronic signature. As in all cases when it comes to a witnessed document it comes down to the balance of the facts as to whether a signature is witnessed or not. And the best evidence is simply for the witness to state that they did witness the signature, whether it is on paper or on a screen. The legal system needs to get over its self and move with the technology. We did get rid of seals eventually, so paper will go to.
Why has technology not created a system that can show a signature has been witnessed??? Why do banks want trust deeds certified to open bank accounts?? Let us not blame the legal people let us find a solution.
Never understood the point of “witnessing” a signature. More legal BS that doesn’t prove or disprove anything; just another thing used to trip up or trap people.
I just cannot see how someone can witness an electronic signature. It would mean being in the same room as the person and confirming they logged in as who they are and then read and signed the document electronically. We still ensure all deeds and original set up documents are wet signed.