Buying Real Estate in a Family Trust? 

There are many good reasons for buying real estate in a Family Trust, particularly when the property is not your home.

Where you don’t have a Family Trust, we can discuss the pros and cons with you, and create the Trust document, called a Discretionary Family Trust Deed.

When buying in a Trust, there’s a lot more to the process than simply writing the Trustee’s name on the Contract.

These suggestions will help you get organised & make the process for buying real estate in a family trust streamlined and stress-free.

Before You Start

1. Make sure you have the original signed and dated Trust Deed and any Deeds of Variation.

2. Read these documents and confirm the name of the Trustee to be written on the Contract.

3. Talk to your Lawyer about whether any changes should be made to the Trust Deed; and the finance arrangements for the purchase.

Completing The Contract?

4. The correct name is the full name of the Trustee plus “as Trustee for the … Trust”.

5. If John & Mary Smith are the trustees of the J & M Family Trust, the name of the Buyer is “John Smith & Mary Smith as Trustees for the J & M Family Trust”.

Contract Conditions

6. If you are borrowing money, make the contract subject to finance and allow 4 weeks to obtain a loan approval and to review the mortgage & guarantee documents.

7. Some Sellers (such as property developers) may require personal guarantees from the Trustees or the Directors of the Trustee company.

Signing The Contract

8. If the Trustees are 2 or more individuals, each Trustee signs the Contract.

9. If the Trustee is a company with 2 Directors, both Directors sign the Contract.

10. If the Trustee is a company with a sole Director and Secretary, that person signs the Contract as Sole Director / Secretary.

Borrowing Money

11. When submitting your finance application, your Lender will require the financial accounts of the Trust, as well as the personal financial accounts of the Trustees or the Directors of the Trustee company.

12. Your Lender will review the Trust documents to verify that the Trust has the power to buy real estate and borrow money.

13. The Trustees or the Directors of the Trustee company will be required to provide personal guarantees.

Certified Trust Documents

14. You will need to provide a certified copy of the Trust Deed and any Deed of Variation.

15. A Lawyer or Justice of the Peace can certify these documents by:

(a) reviewing the signed original documents and comparing them with the copies;

(b) signing every page of the copy documents; &

(c) completing a certification verifying that they are complete and correct copies.

16. The Trust Deed does not need to be stamped with the Qld Office of State Revenue if it was created after 1 March 2002.  However, some Deeds of Variation will need to be stamped, and Statutory Declarations may also be required as part of the stamping process.

Disclaimer: The above is to be considered as general education. This is not advice and it is not to be acted upon without advice from a qualified professional who understands your personal circumstances.

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