Question 1

Is this document a legal document?

Accepted Answer

All master documents have been signed off by Abbott & Mourly lawyers. Tony Anamourlis of Abbott & Mourly advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LightYear Docs 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 LightYear Docs 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 Abbott & Mourly.

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.

Question 2

Is the document easy to read?

Accepted Answer

All LightYear Docs products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lightyeardocs.com.au.

Question 3

Who prepares the LightYear Docs Loan Agreement?

Accepted Answer

This has been prepared by Abbott & Mourly and abides by the provisions of the Credit Act.

Question 4

Who can be the Lender and the Borrower?

Accepted Answer

There are no limitations to who can act as either the Lender or the Borrower. However, where the lender is an SMSF, it can only act in such a capacity if the loan is not provided to a related party of the SMSF or if it is to a related party it does not breach the in-house assets test. Where the borrower is an SMSF a Limited Resource Borrowing Arrangement must be established.

Question 5

What is the interest rate?

Accepted Answer

The LightYear Docs Loan Agreement enables the Lender and the Borrower to set an appropriate interest rate. However the Loan Agreement should not be used for the purpose of Division 7A or a related party loan under an SMSF LRBA.

Question 6

What happens on the death of Lender or Borrower?

Accepted Answer

If a Lender or Borrower dies, assuming that they are individuals, the deceased’s estate will take over the responsibilities of Lender or Borrower. It should be noted that death is a termination event under the Loan Agreement.

Question 7

Can the Loan Agreement be used for an SMSF LRBA?

Accepted Answer

The loan agreement cannot be used as a related party loan for an SMSF LRBA. Advisers should use The LightYear Docs RPA – Related Party LRBA meeting ATO guideline – PCG 2016/5 RRPL has the following ten documents compiled into one process:

A Product Disclosure Statement
The Commissioner’s guideline PCG 2016/5 as a reference for compliance purposes
Trustee minutes upgrading the deed and authorising the acquisition of a single acquirable asset under a Holding Trust
SMSF Deed Upgrade plus minutes
Investment Strategy covering asset and loan
Holding Trust establishment plus minutes
Related Party Loan
Mortgage Deed
Personal Guarantee (optional)
Lease if asset to be used for rental income (optional)

Question 8

Is this document reviewed regularly?

Accepted Answer

All LightYear Docs documents form part of the LightYear Docs internal document review cycle. All documents are scheduled to be reviewed at least annually or when required to do so, due to changes in legislation. The LightYear Docs review cycle ensures all of our documents remain current and accurate.

All Purposes Loan Agreement

All Purposes Loan Agreement