Single Family Discretionary Trusts - Company Trustees

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  • Features of our single family discretionary trust deeds are:

    • they protect the trustee against liability under the prudent person rules that now form part of the Trustee Act
    • the deed protects directors of corporate trustees against personal liability to the extent permitted under the Corporations Law
    • the deeds contain power to add and delete beneficiaries
    • trust income is defined as assessable income for tax purposes
    • we have a linear class of eligible beneficiaries

    Important Notes

    1. This trust is only suitable if the appointor (together with the trustee) is to have total control of the trust, other than possibly for replacement of the trustee. It is generally suitable for single families only.
    2. The settlor must be independent of the trustee and the appointor. The settlor must pay a nominal amount generally $10 to create the trust from his or her own funds. The payment must not be refunded. The settlor must not be a beneficiary or someone that you may want to be a beneficiary. We recommend that the settlor not be the accountant or professional adviser for the trust.
    3. The trustee is assumed to be controlled by the appointor. This implies the appointor is a director and shareholder.
    4. The appointor or appointors are normally the first group beneficiary or beneficiaries. The appointor has the power by their Will to nominate capital beneficiaries and the vesting date.
    5. The appointor also has the power to replace the trustee. The present law provides that an appointor's powers cannot be exercised by the appointor's trustee in bankruptcy to replace the trustee and vest the trust's assets in favour of a bankrupt beneficiary's estate. If bankruptcy of an appointor becomes an issue, if enough notice is given it can possibly be managed by changing the trust deed before bankruptcy happens.
    6. Each appointor will have the power to nominate someone in their place.
    7. The trustee is a potential beneficiary as are the first, second and third group beneficiaries and the discretionary beneficiaries. In addition, they are all default beneficiaries in that order.
    8. The first group beneficiaries are those entitled to income and capital if the trustee does not decide otherwise.
    9. The second group beneficiaries are those entitled to income and capital if the trustee does not decide otherwise and if both the first group beneficiaries have died. Normally they are the first group beneficiaries' (first trustees') children.
    10. The third group beneficiaries are those entitled to income and capital if the trustee does not decide otherwise and if the first and second group beneficiaries have died. They are the grand children and further issue of the first group beneficiaries.
    11. The discretionary beneficiaries are additional beneficiaries who are entitled to income and capital if the trustee decides but not otherwise, and they are:
      1. spouses (including defactos) of the second and third group beneficiaries
      2. any persons or companies (whether beneficially or as trustees) as the appointor may appoint by written or oral notice to the trustee (providing it does not cause a resettlement)
      3. the first trustee
      4. any religious institution or charity
      5. any trust of which a beneficiary is a beneficiary
      6. any proprietary company in which a beneficiary is a shareholder
      7. any deceased estate of which a beneficiary is a beneficiary

    Price Sale $550.00

    (including GST)

    Registration Fee: $138.50
    Stamp Duty: $500.00
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