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This Discretionary Family Trust Deed is for the establishment of a discretionary trust where an individual is the trustee. We strongly recommend that you do not use an individual as a trustee and instead recommend you have a company as the trustee. The LAWLIVE™ library has a trust deed and related documents where the trustee is a company. If you are committed to having an individual as a trustee, then these documents will provide you with the trust deed for establishing the trust and various other documents that you will need as well as Checklists and Notes.
In 2006, the Federal Court made a significant legal finding in relation to property held in a discretionary trust, which challenged the traditional proposition that such property is generally not accessible except as provided in the Trust Deed. The Court held that, in some circumstances, property held by a trustee (whether a company or individual) on trust for an individual and that individual is the "effective controller or owner of the trust property", then that property may be available to creditors of the individual.
Therefore it is important when establishing a discretionary (family) trust to ensure that an individual who may be at risk of pursuit by creditors is not an appointor or trustee (or major or sole shareholder of a company appointed as trustee) so that trust property will remain quarantined from creditors.
This is a complex document which involves the creation of complex legal rights and obligations and may give rise to various taxation and liability consequences. The best way to use this document is to complete it, print it out, print out all of the checklists that apply to it and all other LawLive information that relates to this type of document. When you have done this, LawLive recommends you instruct lawyers to assist you in the finalisation of the document and that you take tax advice from your accountant or tax adviser as to any income tax, capital gains or GST consequences.
LAWLIVE does not give legal advice, and we strongly recommend that you obtain legal advice before creating a trust, using it to run a business or to acquire assets.
This Discretionary Family Trust Deed contains the following provisions:
2. Income as to Trust Fund
3. Infant Beneficiaries Application of Income
4. Receipt of Moneys
5. Loss or Outgoings
6. Capital of the Trust Fund
7. Infant Beneficiaries and the Trust Fund
8. Minutes of the Trustee
9. Exclusion of Trustee Act Sections
10. Powers of the Trustee
11. General Powers
12. Powers Only Exercisable with Consent
13. Limitation of Liability
14. The Appointor and Appointor's Powers
15. Further Settlement on this Trust
16. Exclusion of Beneficiary
17. Excluded Person
18. Transfer to Another Trust
19. Applicable Law
This document comes with the following attachments:
1. Checklist for a Trustee of a Discretionary Trust
2. Checklist when Acting as Trustee of a Discretionary Trust
3. Statutory Declaration
4. Stamp Duty Links for Discretionary Trusts
5. Additional Documents Available - Registers
6. Notes to Discretionary (or Family) Trusts
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