Trust Deeds


We provide the following services-

·  Advice on the use of discretionary trusts.

·  Advice on unit trusts.

·  Preparation of discretionary trust deeds.

·  Preparation of unit trust deeds.

·  Preparation of minutes for unit trust.

·  Preparation of documents associated with the unit trusts.

Discretionary Trusts

Discretionary Trusts are often used as the structure to undertake family investment or business activities.

The essence of a discretionary trust is as follows:

1.  a discretionary trust is established by the execution of a deed of trust or deed of settlement between a settlor and the trustee;

2.  the settlor is the person who establishes the trust fund by payment of a small amount of money such as $10.00 to the trustee and is often a lawyer or accountant;

3.  the trustee can be an individual or individuals but is more frequently a company;

4.  the trustee acts on behalf of the beneficiaries of the trust and normally engages in investment or business activities to derive an income for the beneficiaries;

5.  a primary beneficiary which is usually the husband and/or the wife often provides loans to the trust fund to enable the trustees to undertake the investment or business activities;

6.  an appointor is usually nominated in the trust deed and more frequently is the husband or wife or both;

7.  the appointor has the power to hire and fire the trustee;

8.  the guardian is often but not always appointed to monitor any changes to the trust deed.

Under a discretionary trust deed:

1.  beneficiaries only have an entitlement to receive income and do not have a right to require the trustee to allocate income to them;

2.  beneficiaries have an entitlement to receive capital from the trust fund but do not have a right to have any part of the trust funds to be transferred to them;

3.  the trustee has the discretion to allocate income each year to the various beneficiaries

4.  the trustee has the discretion to allocate part or all of the capital to any beneficiaries;

5.  once an allocation is made to a beneficiary then the beneficiary has a right to the income or capital allocated.

Unit Trust

Unit trusts are frequently used by parties, joint ventures or syndicates, as a vehicle for business undertakings or property developments.

Beneficiaries in a unit trust are often called unit holders and have specific allocation of units.

The main difference between a discretionary trust and a unit trust is that the unit holders in a unit trust have a guarantee right to income or capital in proportion to the units held unlike a discretionary trust where the entitlement is dependent on the trustee exercising the trustee’s discretion to allocate income or capital.

A Unit trust is established by

1.  a settlor, a trustee and the unit holders signing a deed of trust;

2.  the settlor paying to the trustee a settlement sum (i.e. $10.00) to establish the trust fund;

3.  unit holders frequently contribute capital towards the trust fund in proportioned to their unit holdings to provide sufficient funding for the trustee to undertake investments, business activities or property developments;

4.  the trustee is usually a company in which the shares are held by the unit holders or their representatives in the same proportion as their units.

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4 Albion Street,
Harris Park, NSW 2150

Phone: 02 9687 7000
Fax: 02 9687 3000

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