8 steps to set up a discretionary trust / family trust
Posted June 12, 2015
A trust is a legal relationship whereby one person (the ‘trustee’) holds assets for the benefit of one or more other parties (the ‘beneficiaries’). A discretionary trust (also known as a family trust) is a trust in which the trustee is given the power/discretion to decide which of the beneficiaries are to benefit from the trust.
A discretionary trust is an important vehicle for a number of reasons, which include:
Asset protection – the assets of a discretionary trust are distinct from the assets of the beneficiaries of the trust and may be protected from creditors in circumstances where a beneficiary is sued or made bankrupt;
Minimise tax – by distributing income
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This discount is also available to individuals, but not companies.
Legal, accounting and/or tax advice may need to be sought to determine whether a discretionary trust is appropriate based on your circumstances. Set out below are the steps required to setup a discretionary
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In New South Wales, stamp duty of $500 is payable in respect of each new trust within three months of the trust being established in accordance with the provisions of the Duties Act 1997 (NSW), which is administered by the NSW Office of State Revenue. If duty is not paid within three months then interest is payable until such time as the duty is paid.
6. Apply for ABN and TFN
Once the trust has been established an application for an Australian business number (ABN) and tax file number (TFN) should be made for the trust. An application for both an ABN and TFN can be made online through the Australian Business Register or with the assistance of an accountant or lawyer. This can take up to 28 days.
7. Open bank account
Once the discretionary trust has been established and the trust deed stamped (if stamping is necessary) then a bank account should be opened for the trust in the name of the trustee as trustee for the trust. The bank may require the trust ABN before it will open the
A Quistclose trust arises when money is paid to a recipient for a specific purpose, if that purpose fails the money is held on trust for the payer. It mostly arises in insolvency cases where the proprietary rights have to be established. However, this type of trust has been thought to be inconsistent with the traditional trust principle. Many have suggested the Quistclose trust must be treated as any other fully fledged security device taking into account the protection it offers the payer on insolvency and should therefore be registrable. This essay critically analyses the concept of Quistclose trust, whether it differs from the resulting trusts.
Akin to Bahr v Nicolay, by notice of the Stan’s interest in the property and gave the promise to honour the agreement, Stan’s interest constituted an equitable interest in the land. Ron became subject to a constructive trust in favour of Stan. If Ron repudiates the unregistered interest after registration, he is, in equity’s eye, acting fraudulently and he may be compelled to honour the unregistered
Everyone should have a power of attorney document in place in case of an emergency situation such as a serious illness or incapacitation making it impossible to make decisions concerning health care and living arrangements. Having this document becomes more important as individuals age because it is more likely that a person will have health issues such as a stroke. One of the first things to consider is choosing a responsible person to act as an agent to make important decisions. Most individuals select a relative such as a spouse, parent or sibling to make difficult choices concerning finances and medical treatments. In many cases, the person selected as an attorney-in-fact or agent is already a caregiver for an infirm or elderly individual. Anyone chosen to act as an agent or attorney-in-fact is required to behave honestly with the person represented. Occasionally, an individual might hire a professional to act as an agent.
It has been generally acknowledged that the doctrine of proprietary estoppel has much in common with common intention constructive trusts, i.e. those that concern the acquisition of an equitable interest in another person’s land. In effect, the general aim is the recognition of real property rights informally created. The similarity between the two doctrines become clear in a variety of cases where the court rely on either of the two doctrines. To show the distinction between the doctrines, this essay will analyse the principles, roots and rationale of both doctrines. With reference to the relevant case law it will be possible to highlight the subtle differences between the doctrines in the cases where there seems to be some overlap. Three key cases where this issue surfaced were the following: Lloyds Bank Plc v. Rosset (1991), Yaxley v. Gotts (1999) and Stack v. Dowden (2007). This essay will describe the relevant judgements in these cases in order to show the differences between the two doctrines.
Bruguera, T. (Unknown). An Object for TH - "Disciplinated Trust". Available: http://www.taniabruguera.com/cms/489-0-An+Object+for+TH+-+Disciplinated+Trust.htm. Last accessed March 2014.
Moreover, trust is a firm belief in the reliability, truth, ability, or strength of someone or something which can be achieved with mutual understanding communicated in an unbiased and ethical manner. To conclude, it is very necessary to avoid the situations where the trust can be broken, abused, misplaced, and violated since it is very dynamic in nature and it can be easily damaged but difficult to reform and reconstruct.
Any entity, that is businesses charities etc, carrying on an enterprise can register for GST through the Australian Taxation Office or the ATO.
Remember, before you take the legal action of creating a trust, it is almost always in your best interest to consult a lawyer for more information and guidance.
Trust is the one area that has caused many people, jobs, relationships and nations to fall. From a social aspect, trust reaches several directions in your life. To define trust we tend to relate it a person character based on their history and reliability that we have seen for our self. Trust can also formed or gained when someone or a group is willing to believe that the other person or group will do what they say. This situation directed at the future instead of being based on what I know of you. Now this becomes a risk that you have put yourself in when you rely on someone else to do something. The uncertainty involves the risk of failure or harm to the trustor if the trustee will not behave as desired. Vladimir Lynch Lenin once said "Trust is good, control is better". Sometime its what we have experienced in other situations that keep us from trusting in other people even if they have not done anything to give us cause to think otherwise. A lot of the time I
The general partner is unsure of the business structure and is considering other options e.g. Sole proprietorship or Limited Liability
Trust can take on many meanings in today’s society. It can exist in all aspects of our lives, and can have a dramatic impact on one’s personality. Trust, as a noun, is an assured reliance on the character, strength, or truth of someone or something; or a property interest held by one person for the benefit of another. Trust, as a verb, is to permit to stay or go or to do something without fear or misgiving.
The issues we had to explore in this problem were a possible breach of trust as well as breach of fiduciary duty. I had always found it difficult to distinguish between the two, owing to the similar duties they give rise to, even with explanation from lectures and the block guide; however, this PBL illustrated the distinction between the two. For failing to act in accordance with the duty of care he owed to his beneficiaries under the Trustee Act 2000, by imprudently investing trust money, the trustee might have breached the trust. But, because the assets he purchased belonged to himself, it was possible that the trustee was also in breach of fiduciary duty. From this I found that fiduciary relationships may be broken when an individual, such as a solicitor, fails to put their client 's interests ahead of their own in commercial contractual transactions, but fiduciary relationships may be broken when a trustee fails to avoid conflict between their personal interests and their duty to protect trust assets - this is the first overarching
In the second phase, if the deed of arrangement is approved, the company will then be administered under the terms of the deed as discussed previously in chapter one.
Trust means a trust is in fact a series of relationship between the parties. Trustee means a trustee is a
Religious trust utilized their funds as per guidelines specified by donor. The trusts work in their specific areas in which they are registered. Maximum utilization of trust funds to deprived persons.