Using a Family Trust when buying Real Estate

There are many good reasons for using a Family Trust when buying Real Estate.

If you don’t have a Family Trust, we can discuss the pros and cons with you, and create the Trust documents.

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

These suggestions will help you get organised & make the buying process 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 note 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?

1. The correct name is the full name of the Trustee plus “as Trustee for the … Trust”.
2. 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

1. 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.
2. Some Sellers require personal guarantees from the Trustees or the Directors of the Trustee company.

Signing The Contract

1. Where 2 or more individuals are the Trustees, each person signs the Contract.
2. If the Trustee is a company with 2 Directors, both persons sign the Contract as Directors.
3. Where the Trustee is a company with a sole Director and Secretary, that person signs the Contract as Sole Director / Secretary.

Borrowing Money

1. Your Lender will require the financial accounts of the Trust, and the personal financial accounts of the Trustees or Company Directors.
2. Your Lender will review the Trust documents to verify that the Trust has the power to buy real estate and borrow money.
3. The Trustees or the Directors of the Trustee company may be required to provide personal guarantees.

Certified Trust Documents

1. You will need to provide a certified copy of the Trust Deed and any Deed of Variation.
2. A Lawyer or Justice of the Peace can certify these documents by:
   1. reviewing the signed original documents and comparing them with the copies;
   2. signing every page of the copy documents;
   3. completing a certification verifying that they are complete and correct copies.
3. The Trust Deed does not need to be stamped with the Qld Office of State Revenue if it was created after 1 March 2002.