FAQs

A trustee is a natural person or a corporate entity that is responsible for managing the assets of a trust. The trustee is appointed by the grantor, who is the person who creates the trust. The grantor typically appoints a trusted family member, friend, or a corporate entity to serve as trustee.

The trustee is given legal title to the trust property, but he or she holds that title on behalf of the beneficiaries and is required to manage the trust property per the terms of the trust agreement.

The trustee has a legal duty to act in the best interests of the beneficiaries and in good faith and with loyalty to the beneficiaries. If a trustee breaches their fiduciary duty, they may be held liable and be removed from office by a court.

Deciding on whether to appoint a corporate or an individual trustee for your trust is a key decision that will have lasting implications. There are pros and cons to both types of trustees, and the best choice will depend on your specific circumstances.

The setting up cost for a corporate trustee might be higher than an individual trustee but it has its own benefits like

• Greater Asset Protection
• Perpetual Succession
• Limited Liability

You may go through the below link to get a detailed overview on this.

A discretionary trust is a type of trust in which the trustee has discretion over how to distribute the trust assets.

Discretionary Trusts can serve an important purpose for those looking to protect their assets or save on taxes by sharing income among family members.

The trustee has the flexibility and authority to change proportions that are distributed; determine who receives money, when they receive it or how much is given out at any one time. This ensures stability during difficult economic times as well!

For example:

A and B decide to form a discretionary trust. The trust earns an income of $60,000 at the end of the year. This income will be divided between A & B as per the discretion of the trustees. This could be done in a way to minimize the tax consequences for individual beneficiaries.

In a unit trust, the trust property's income is split into several fixed units. The split of a trust's ownership into fixed units is what determines how the income from that part will be distributed.

The value of the units is based on the value of the assets in the fund. The unit holder's rights will be proportionate based on how many units they own.

Unit trusts are a popular way to invest because they offer diversification and professional management. This structure is a great way to invest in something that has growth potential while still maintaining some degree of control.

For example:

J and K are two friends forming a unit trust. The ownership is split into 2000 units for J and 4000 units for K. The trust earns an income of $60,000 at the end of the year. The share of J and K will be based upon the number of units held. Share of income for J will be $20,000 and $40,000 for K.

The short answer is yes; a trustee can also be a beneficiary of a trust. However, they are not allowed sole ownership because this would create an illegal situation from both legal perspectives - for themself as well as those under the law's protection (i e., beneficiaries).

There are also some important considerations that need to be considered:

• First, the trustee will need to ensure that they are acting in the best interests of all the beneficiaries.
• Second, the trustee will need to be very careful to avoid any conflicts of interest.
• Third, the trustee will need to disclose their status as a beneficiary to all other beneficiaries.

Recommended, yes. Even though any company already in existence can be appointed as a trustee, but it is recommended to incorporate a new company which is entirely responsible for acting as a trustee and does not get affected by any of its previous activities. By doing so, you could provide significant protection for the assets of the trust.

A new company is often set up as the corporate trustee to protect your assets from any potential liability. For example, if you use one that has previously traded or incurred debts with Australian Taxation Office (ATO), they may be subject to an unfair dismissal claim and/or court cases which would affect not just what's happening now but also future generations!

Trusts are a perfectly legitimate way for individuals, families, or businesses to conduct their business in Australia. In Australia, the use of trusts has become increasingly popular in recent years, particularly as a way to reduce tax liabilities.

The number of trust structure businesses in Australia has been on the rise for some time now. In fact, as you can see from these statistics below-it's increased quite significantly over the past few years!

And the trend continues to rise!

The above statistics has been sourced from the Australian Tax Office portal. You can access this information by going to the link below for a detailed overview of their findings.

While trusts are typically associated with personal finances, they can also be used for business purposes. In fact, many businesses are structured as trusts. The reason for this is that trusts offer a number of advantages when it comes to taxation, liability protection, and asset management.