Guide to preparing your customised Family Trust Deed
When we prepare your Family Discretionary Trust Deed, the following questions need to be answered:
1. Name of the trust
What will be the name of the trust?
Note: It is usual to include the word “Family” in the name of the trust (eg, “the Kennedy Family Trust”), but this is not essential – you can leave out the word “Family” if you would prefer. In fact, you can call the trust whatever you like – the name is not determinative of anything.
2. Settlor
The Settlor must be an individual who’s at least 18 years old.
What does the Settlor do?
The trust will be established by the Settlor paying the settlement sum of $10 to the Initial Trustees. The Settlor must actually pay over that amount, as it forms the trust fund upon establishment of the trust.
Who should be the Settlor?
The Settlor, members of the Settlor’s family and their associated companies are all excluded from being beneficiaries under the trust. So pick a close friend or colleague who is not a member of the family.
Details of the Settlor
Full name:
Address:
Phone:
Fax:
Email:
3. Initial Appointors
What do the Appointors do?
The Appointors are the people with the power to appoint and remove the trustees of the trust. They don’t actually administer the trust – the trustees do that – but the appointors have ultimate power over the trust by virtue of being able to appoint/remove the trustees at any time.
Who should be the Initial Appointors?
An Initial Appointor must be an individual who’s at least 18 years old. Typically, if any of the Primary Beneficiaries are already at least 18 years old, an Initial Appointor is also one of those Primary Beneficiaries.
What happens if a sole Appointor dies or goes bankrupt?
If an Appointor goes bankrupt, they are immediately and automatically removed from being an Appointor. If a sole Appointor dies or goes bankrupt, a majority of the Primary Beneficiaries can appoint a new Appointor.
How joint Appointors will act
If there are multiple Appointors at a given time, they will need to act jointly. You can choose whether they will need to do so unanimously, or whether a majority of the Appointors can act together.
If there are multiple Appointors at a given time, how will they be required to act? Unanimously or by majority?
Number of Initial Appointors
Please Note: If there is only one Appointor, and that person is also the only Primary Beneficiary and the only Trustee (or the only director of a sole corporate Trustee), then the trust may be held to be invalid. If you want to have a single Appointor who is also the only Trustee (or the only director of a sole corporate Trustee), then you will need to name at least one other Primary Beneficiary.
How many initial appointors will there be?
Details of Appointor
Full name:
Address:
Phone:
Fax:
Email:
4. Primary Beneficiaries
What do the Primary Beneficiaries do?
The Primary Beneficiaries are the beneficiaries under the trust who are specifically named in the trust deed – the full range of beneficiaries under the trust is then defined by reference to the named beneficiaries. The full range of beneficiaries is defined extremely widely to include the extended family members of the named beneficiaries, and entities associated with them.
The Primary Beneficiaries are not involved in the administration of the trust, and have no control over the trust, except a very particular and limited power to appoint a new Appointor, by way of a majority decision of the Primary Beneficiaries, if the office of Appointor becomes vacated.
Who should be the Primary Beneficiaries?
This is totally up to you. In general, it doesn’t hurt to define the range of beneficiaries more widely – however, bear in mind that the Primary Beneficiaries will have a residual power to appoint a new Appointor if the office of Appointor become vacated.
Number of Primary Beneficiaries
Please Note: If there is only one Primary Beneficiary, and that person is also the only Appointor and the sole Trustee (or the only director of a sole corporate Trustee), then the trust may be held to be invalid. If you want to have a sole Appointor who is also the only Trustee (or the only director of a sole corporate Trustee), then you will need to name at least one other Primary Beneficiary.
How many primary beneficiaries will there be?
Details of Primary Beneficiaries
Full name:
Address:
Phone:
Fax:
Email:
5. Initial Trustees
What do the Trustees do?
The Trustees are the persons who actually administer the trust – they hold the trust assets on trust for the beneficiaries, and make the decisions about handling the trust accounts and distributions. When the trust acts, it does so through the Trustees.
Although the Appointors have ultimate control over who acts as Trustee, it is the Trustees who will have legal title to, and direct control over, the trust assets.
Who should be the Initial Trustee?
The Initial Trustees may be individuals of at least 18 years of age, or companies.
If there are multiple Trustees, how will they act?
If there are multiple Trustees at a given time, they will need to act jointly. The approval of a majority of the Trustees will be required.
Number of Initial Trustees
Please Note: If there is only one Trustee, being an individual or a company with a sole director, and that individual/director is also the sole Appointor and the sole Primary Beneficiary, then the trust may be held to be invalid. If you want to have only one Trustee, being an individual or a company with a sole director, where that individual/director is also the sole Appointor, then you will need to name at least one other Primary Beneficiary.
How many initial trustees will there be?
Are any initial trustees individuals?
Are any initial trustees companies?
Details of Trustees
Full name:
Address:
Phone:
Fax:
Email:
6. Governing law
Which state/territory will govern the trust?
7. Foreign persons
Would you like to exclude foreign persons from being beneficiaries under the trust?
- Please note that this exclusion will apply to both primary and general beneficiaries.
You should obtain legal advice if you intend to purchase property through this family trust. New legislation may impose duty surcharges in relation to the purchase of certain property within some states by a foreign person, and there are also potential land tax surcharges. The definition of “foreign person” has been broadly defined so that is may include the beneficiaries under a discretionary trust.
If you’d like, you can specifically exclude “foreign persons” for these purposes from being beneficiaries under this trust. This includes a “foreign person” as well as a “foreign trustee”, an “absentee person” and a “foreign purchaser”.