Trust Lawyers
Trusts can be powerful tools for protecting your assets, providing flexibility around control, planning and taxation, and provide a platform to carry assets between generations.
There are significant financial benefits for you and your family holding assets in trusts. However, setting up a trust can involve legal complexities, and getting it wrong can lead to ongoing issues. It is vital to consult a specialist trusts lawyer to discuss your personal situation, which trust would be right for you, and the benefits a tailored trust deed can provide compared to an ‘off the shelf’ standard trust deed.
If you’re considering setting up a trust and need more information on the right type of trusts for your needs, get in touch with our knowledgeable trust lawyers.
What are trusts?
A trust is a formal legal relationship between a trustee and a beneficiary. A trustee can be a company, individual or a group of people. It is a trustee’s legal obligation to look after the trust property, invest and use it wisely for the benefit of the beneficiary. The beneficiary is the person or people who benefits from the trust.
Types of trusts in Australia
1. Fixed Trusts
These involve the automatic and fixed transfer of property to the beneficiaries of the trust. This means that the trustee has no choice in whether or not to give the fixed income to the, or on behalf of the benificiary.
2. Unit Trusts
Unit trusts are types of fixed trusts, where beneficiaries of the trust hold units of the trust – similar to how shareholders own shares of a company. Beneficiaries of unit trusts are called unitholders and are typical of property investment where units can be bought and sold by the respective various beneficiaries.
3. Testamentary Trusts
Testamentary trusts are trusts that are created when the testator dies. This usually means that the testator dictates the terms of the trust and on what conditions the income may be released to the beneficiaries in their Will. This could involve a minimum age upon which the trust may be accessed. Testamentary trusts are closely linked with Wills and Estates and can be challenged by a potential beneficiary, or the beneficiary themselves. Usually, this would mean that a family member would contest a Will and apply to have the terms of the trust amended.
4. Discretionary Trusts (Family Trusts)
It is probably the type of trust that most people will come into contact with, as they are often used by families where the trustee decides to establish a trust for the benefit of another family member/s and for tax planning purposes. They are also very commonly used in family run businesses, so that the income of the business can be distributed evenly between various family members.
While they’re commonly known as family trusts, they don’t necessarily have to involve family members. Discretionary trusts are set up for a variety of reasons, including to maximise control over the assets, allowing the trustee to retain almost complete control over how assets are distributed. They are called ‘discretionary’ because unlike a fixed or unit trust, the Trustee has total discretion in deciding how to distribute the income and assets of the trust.
5. Hybrid Trusts
Hybrid trusts involve elements of both fixed and discretionary trusts, meaning that the trustee has a given amount of rights over the various assets under the trust, while also conceding certain rights to beneficiaries.
6. Charitable Trusts
Charitable trusts involve the establishment of a trust which is tasked with managing the relationship between the trustee and the beneficiary which is usually a charitable organisation, or group of organisations that fulfil a charitable goal, while also allowing the trustee to take advantage of tax concessions.
7. Superannuation Trusts
All superannuation within Australia is managed via trusts. The trust deed establishes the terms of the superannuation trust and ensures that once retirement age is reached, the trust beneficiaries gain access to their trust income. Wills and Estates lawyers are particularly interested with superannuation trusts, your superannuation
and death benefits should always form part of your estate plan, even though your interest in the superannuation trust does not necessarily form part of your estate.
8. Bare Trusts
Bare trusts involve one trustee and a single legally competent beneficiary which may dictate the terms of the trust deed. In bare trusts, beneficiaries retain complete control over the trustee and are common where the beneficiary wants to remain anonymous by using a so- called shareholder nominee as their proxy.
Making the decision about which trust is right for you depends entirely on your financial goals. Whether you’re a beneficiary, a trustee, or interested in setting up a trust for your family, ensuring your assets work for you and your family is essential. To get the legal guidance you need, contact our qualified team at PB Lawyers Australia.
What to Expect when working with PB Lawyers Australia
Here are some reasons why people choose us:
- Punctual and Precise: From your first consultation until a successful solution, we will work hard to resolve your matter fast and with precision. We answer all enquiries quickly as we understand how stressful legal pressures can be. And more often than not, time is crucial, so we act promptly. Having the right lawyer in your corner is the most important aspect when dealing with legal matters, so as we are fast, we are also as experienced and thorough.
- Understanding and Perceptive: We understand that being involved in any legal matters can be stressful. So, we take the time to learn your situation and get a good grasp on all the relevant factors and use that information to work for you in the best way possible. We’re here to guide you every step of the way, we will listen to you, offer advice, answer any questions you have and ensure that you have all of the information you need to make an informed decision every time.
- Affordable and Reasonable: There is no surprise in saying that legal fees can be expensive, however, engaging a lawyer may be less expensive than you realise. Doing so will most definitely reduce the amount of stress and the amount of time in dealing with your legal matters. We offer flexible billing arrangements for our services, including event billing, time interval billing and fixed rate fees. We’ll also be transparent with you about the costs surrounding resolving your matter and provide you with a quote once we’ve had a consultation with you and understand your situation.
- Experienced and Knowledgeable: Each member of our trusted team has years of experience in the areas of law they each practice, coming from different cultural and societal backgrounds. This allows us to understand your situation more easily and work together to find the best outcomes for your situation. Like we said before, no two situations are the same, but our vast range of experience means that we can certainly help you.
Our Trust Law Solutions include:
Assisting You Gather Relevant Documentation
Drafting Required Documents
Giving You Advice on the Best Method to Proceed
Providing a Free First Consultation
Liaising with Your Financial Planner
Speaking with Your Accountant
Comprehensive Trust Determination For Your Needs
Lodging Appropriate Documents
Advising on Possible Beneficiary Claims
Client Testimonials and Reviews
Frequently Asked Questions
How long does a trust deed last?
A term of a trust deed can be nominated in the trust deed but cannot be longer than 80 years.
What is the benefit of a Family Trust?
A family trust is an example of a Discretionary Trust. This means that the trustee of the trust has the discretion to proportion assets such as income, profits or shares that individual beneficiaries are assigned and the timing at which they receive these assets. This allocation can be changed repeatedly at the discretion of the trustee and therefore can provide tax advantages and protection of assets from creditors.
Is a trust a legal entity in Australia?
A trust is not a legal entity in Australia. Therefore, trust can’t enter into legal agreements in its own capacity. A trust also won’t have the benefit of being a liability limited entity. For example, when executing a document, an individual must sign on behalf of the trust.
Are Trusts still worth the time and effort?
Yes, depending on your specific financial and personal circumstances if they are carefully drafted. In appropriate circumstances, trusts continue to offer asset protection, tax, relationship breakdown and creditor protection benefits.
