SMSF independent legal advice
Guaranteeing your SMSF’s loan? Get advice on the LRBA.
When your self-managed super fund borrows under a limited recourse borrowing arrangement, the lender usually requires each member to personally guarantee the loan — and to obtain independent legal advice. We provide it online, Australia-wide, same day.
How SMSF borrowing works
Limited recourse, personal guarantee.
A self-managed super fund can’t simply take out a normal loan. To borrow — usually to buy property — it must use a limited recourse borrowing arrangement, or LRBA. The asset is held in a separate bare trust, and if the fund defaults, the lender’s recourse is limited to that single asset. The fund’s other assets are protected.
That protection is good for the fund, but it’s a risk for the lender. To manage it, lenders typically require the fund’s members — or the directors of the corporate trustee — to step outside the limited-recourse structure and personally guarantee the loan. That personal guarantee reaches your own assets, beyond the super fund.
Because you’re taking on a personal liability behind a structure designed to limit liability, lenders require you to obtain independent legal advice on that guarantee before signing. We give that advice and issue the certificate your lender needs to settle.
Where SMSF guarantees typically arise
- Members guaranteeing an LRBA to buy residential or commercial property;
- Directors of a corporate trustee providing personal guarantees;
- Fund members standing behind a bare trust borrowing;
- Related-party or bank-funded LRBAs requiring member guarantees.
Understand the risk
What guaranteeing an LRBA means for you personally.
Beyond the fund
The guarantee reaches your personal assets — separate from the super fund and its limited-recourse protection.
Limited recourse, for the fund
The “limited recourse” only limits claims against the SMSF. Your personal guarantee is a separate, broader promise.
Each member, individually
Where several members guarantee the loan, each is usually liable, and each needs their own advice and certificate.
Independence is required
The solicitor advising you can’t be the one handling the fund’s purchase or bare trust — the advice must be independent.
Common questions
SMSF guarantor questions.
Isn’t the loan “limited recourse”? Why am I personally exposed?
Limited recourse protects the fund — the lender can only pursue the single asset in the bare trust for the fund’s default. Your personal guarantee sits outside that. It’s a separate promise that can reach your own assets, which is exactly why advice is required.
Can our SMSF’s conveyancing solicitor sign off on this?
Generally not. The advice has to be independent, so the solicitor handling the property purchase or the bare trust set-up usually can’t also provide the guarantor advice. A separate solicitor is needed — which is where we come in.
We have two members. Do we both need advice?
Usually yes — each member or trustee director who gives a guarantee needs their own independent advice and certificate. We can schedule your appointments back-to-back.
What documents should we have ready?
The loan agreement, the guarantee and indemnity, and the bare trust and related LRBA documents. Your broker or SMSF adviser can usually provide these together.
What does it cost, and can it be done online?
A fixed $595 including GST per guarantor, entirely online by video anywhere in Australia, with the certificate issued the same day. Wet-signed originals can be posted where a lender requires them.
About the founder
Advice from Kevin Yau.
Your advice is provided by Kevin Yau, founder of this service and principal of LW Williams and Associates. Kevin has worked as a banker and a mortgage broker, and now practises as a lawyer in banking and finance law — regularly advising both individuals and financial institutions on matters requiring independent legal advice.
LW Williams and Associates is a law firm with a 90-year history spanning four generations, so the person explaining your guarantee is backed by a practice that has advised Australian families and businesses for decades.
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Book your SMSF guarantor advice today.
Bring your LRBA and guarantee documents, choose a time, and we’ll explain your personal exposure.