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If you’re looking to establish your own trust, you’ve come to the right place. At Taxopia, we have an online form to help you easily and quickly establish a discretionary (family) trust under Australian law.
PRICING
The cost to set up a standard Trust is $749 (which includes GST) + relevant State Stamp Duty. The package for a Trust together with a new Trustee company set-up is $1,547, including GST, plus relevant State Stamp Duty.
Current State Stamp Duty Prices:
The price includes:
The intention of this form is to gather most of the data required for us to complete the trust establishment process. The questionnaire takes approximately 10 to 15 minutes to complete, and you can save it and return at any time.
If you require help going through the form, you can email us so that we can assist you in completing the forms.
Whilst completing the form, please ensure that you have used capital and lowercase letters exactly as you would like them to appear on your paperwork.
Once we receive the submitted form, we will review your answers and may discuss with you where required.
If you have any questions, please feel free to contact us at info@taxopia.com.au or call us on 1300 829 674
To start, click on the “Start Now” button below.
When it comes to establishing a trust and managing trust-related matters, both accountants and lawyers play crucial roles. However, there are specific advantages to choosing an accountant over a lawyer for these tasks.
| Factor | Accountant | Lawyer |
|---|---|---|
| Expertise in Financial Management & Taxation | Specializes in tax-efficient trust structuring and financial management | Focuses on legal aspects, may lack deep tax expertise |
| Holistic Financial Advice | Provides comprehensive financial planning services | Focuses on legal structure, not on broader financial advice |
| Cost Efficiency | Generally more cost-effective for trust establishment and management | Typically higher fees, especially for legal documentation |
| Ongoing Support & Compliance | Offers continuous support, tax filings, and compliance | Provides ongoing legal advice, but not day-to-day financial management |
| Access to Specialized Software | Utilizes accounting software for efficient trust management | Relies on manual coordination with accountants for financial management |
Choosing an accountant for trust establishment and related matters offers significant advantages, particularly in terms of tax efficiency, cost savings, and comprehensive financial management. While lawyers are essential for legal compliance, an accountant can provide the holistic financial support needed to manage a trust effectively.
A Trust is an obligation imposed on an individual or company to hold property or assets for the benefit of others. The holder of the trust is called the Trustee and the others are Beneficiaries. Trusts are not at a separate entity therefore liability lies with the Trustee. The Trustee is responsible for all business operations and there are yearly administrative tasks to complete. All transactions are undertaken by the Trustee and all are therefore a personal obligation.
A Trust is a more expensive business structure to set up, but there are benefits to working within this model. The Trustee can be employed by the Trust, and there can be employees. Income Tax doesn’t need to be paid for this structure as an entity but is passed on to beneficiaries however, GST may be applicable. Tax-free capital gains and tax incentives can be claimed by the beneficiaries should the structure be set up to allow this. A Trust requires an official Trust Deed to be completed by a qualified accountant or business lawyer.
There are many types of trusts that individuals and businesses can apply for, but there is no one-size-fits-all type of solution. Choosing the right one depends on numerous factors pertaining to the applicant’s conditions and their overall end goal. Below are three common types of trusts that are usually dealt with.
Discretionary or Family trusts are established when there are family assets which include shares, personal property, or a business that have to be managed by, protected by, and passed on to the next generation. Distribution of income and capital gains to any family member that is deemed fit, is at the discretion of the trustee. The coverage of Family Trusts may include a client’s own family lineage, children, grand parents, siblings, nephews, nieces, and spouse.
When a family member has legally set aside funds or assets for a child under the age of 18 to for future educational, medical, or recreational expenses, a Minor’s Trust ensure the protection and management of those receivables until the child, in this case a beneficiary, becomes an adult. There can be multiple beneficiaries under the one trust and trustees under this category may be a parent, sibling or friend of the minor as long as they are 18 years of age and residents of Australia.
A person may write a will with instructions that can pave way to the establishment of a Testamentary Trust once the said person has passed away. When this happens, the deceased person’s assets are held in trust on behalf of the beneficiaries rather than distributing the assets directly to them. The rules in the Testamentary Trust, as written by the deceased, will dictate the way the assets are distributed to the beneficiaries. This trust also can protect the assets a beneficiary may receive in the event of bankruptcy or business lawsuit among many other instances.
There are many varied benefits and plenty of uses for trusts, so thinking about your specific goals and your beneficiaries is key to choosing the right type. For example, having assets in a trust ensures the professional ongoing management of those assets. From a cost standpoint, trusts can be a good way of reducing tax liabilities and probate fees. Trusts are also established to keep assets out of a surviving spouse’s estate while also providing lifetime income. Individuals with special needs may also benefit from trusts especially if the provisions within them are designed to use the assets in funding their needs. Furthermore, by putting assets inside the legal boundaries of a trust, individuals are protected from poor investment decisions or being taken advantage of by others.
A Trustee is an individual or entity responsible for managing the assets held in a trust on behalf of the beneficiaries. In Australia, the trustee has a fiduciary duty, meaning they must act in the best interests of the beneficiaries. This includes managing trust property, ensuring proper distribution of income or assets, and adhering to the terms outlined in the trust deed. The trustee’s actions are governed by the Trusts Act and common law principles, ensuring they exercise their duties with care, diligence, and integrity. Trustees can be individuals or corporate entities, and their responsibilities can vary depending on the type of trust and specific provisions in the trust deed.
A Beneficiary is a person or entity entitled to receive benefits from the trust, as specified in the trust deed. These benefits can include income distributions, capital, or other assets held by the trust. In Australian trusts, beneficiaries can be specific individuals, companies, or even charitable organizations. Beneficiaries have a right to be informed about their entitlements and can request financial accounts from the trustee. It’s important for beneficiaries to understand that their rights and interests in the trust are determined by the terms of the trust deed and the discretion of the trustee, especially in discretionary trusts where distributions are not fixed.
An Appointor is an individual or entity with the power to appoint or remove the trustee(s) of a trust. This role is crucial as it ensures the trust can operate effectively and adapt to changing circumstances. The appointor holds significant influence over the trust’s administration by being able to replace a trustee who is not performing their duties satisfactorily or if there is a need to change trustees due to legal, financial, or personal reasons. The powers and limitations of an appointor are detailed in the trust deed. In Australia, appointors must act in good faith and in the best interests of the beneficiaries when exercising their powers.
The choice between an individual or company trustee can significantly impact the administration of the trust:
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Opting for a corporate trustee often incurs higher initial and ongoing costs, such as incorporation fees, annual ASIC charges, and compliance costs. However, the benefits can outweigh these expenses:
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The primary differences between a trust and a company in Australia revolve around structure, taxation, and legal status:
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A trust may be a better choice than a company in several scenarios:
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If you set up a new trust, you can transfer property that you already own into it. You should know that the transfer of property into a trust will generally be classed as a sale. This can be an expensive exercise as, in addition to the appropriate sales contracts/agreements, this can incur Capital Gains Tax and stamp duty. Ensure that you speak with an accountant if you’re looking to establish a trust and transfer existing property.
Yes, but you should be aware that if a trustee distributes income to someone under 18, they will be subject to a substantial amount of tax.
Yes, a trustee can be one of the beneficiaries of a trust. For example, an individual could set up a trust, appoint themselves as trustee and distribute income to their family. However, a trustee cannot be the sole beneficiary of a trust. This is because they would legally own property for the benefit of themselves, which is problematic from a legal perspective.
Beneficiaries do not have a claim to any trust distributions. Rather, there is a ‘mere expectancy’ that the trustee may distribute income if they choose. Hence, the term ‘discretionary’ trust.
A beneficiary can request that the trustee act in a particular way through a document known as a memorandum of wishes. This document can outline an arrangement that the beneficiaries may like to have in place. However, as the name suggests, it is merely a ‘wish,’ than an order that the trustee acts a certain way. This is another important reason why you should only appoint a trustee that you trust.
Unlike a person or a company, a trust is not a legal entity that can own property. This is because a ‘trust’ is just a relationship between the legal owner (the trustee) and the beneficial owners (the beneficiaries). As such, documents including a house title, share certificate, or members’ register will list the trustee as the property owner.
Another frequently asked question about trust concerns whether the beneficiaries of a trust all have to be from the same family. A family trust and discretionary trust are essentially the same. The trustee maintains the discretion to distribute income as they see fit. It is more likely, however, that the beneficiaries are all members of the same family. A family trust is simply a commonly used term, rather than a requirement that the beneficiaries all be from the same family. Therefore, there is no restriction on you listing people outside your family as a beneficiary.
However, if you do list people outside your family, you may not be able to make a family trust election for tax purposes. This means you will lose access to certain concessions and benefits you would otherwise get if you make the family trust election. Further, if you make distributions to people outside your family, the trustee might need to pay tax on these distributions at the highest marginal tax rate. This is if you have made a family trust election to the Australian Taxation Office for that trust.
Beneficiaries have no claim to any portion of the trust income. They only receive a benefit when the trustee exercises their discretion and distributes the income. The effect is that a person’s status as a beneficiary does not result in a tangible gain or proprietary interest in the trust property. As there is no claim to the property, you are not subject to tax implications if you do not receive a distribution.
Disadvantages can include that the trustee can stop distributions to a particular beneficiary at any time. Likewise, a beneficiary can do little to change this arrangement. This can present a problem should a dispute arise with the trustee, for example, a family fall out. This is a key reason why you should exercise great care when selecting a trustee.
In short: Yes! The trust deed sets out the scope of a trustee’s powers. So, if you have specific requirements, consider drafting a deed to limit, constrain or manage their powers. Trustees are also subject to a variety of other requirements from both common law and statute.
Notably, a trustee has a fiduciary relationship with the beneficiaries. This relationship exists because of the trust placed in the trustee. To protect those in a vulnerable position (those putting trust in the trustee), the law recognises this special relationship and places duties on the trustee to ensure they act in good faith and the trust’s best interests.