Categories

Accountant Aged Care Allied Health Andrew Bragg Annuity Apps Asic Asset Finance Asset Planning Asset Protection Asset Protection Strategies Assets Assets and Risks Ato Auction Audit Insurance Australian House Market Report Baby Bonus Bas Binding Death Benefit Nominations Binding Financial Agreement Binding Financial Agreements Body Corporate Bonds Borrowing Brexit Budget Budgeting Business Business Registrations Business Support Business Tax Deduction Business Value Capital Gains Tax Capital Gains Tax: Will Capital Protection Catherine Frost Cgt Checklists Commercial Loans Commercial Property Company Tax Concessional Superannuation Contribution Corporate Trustee Cryptocurrency Darren Foster Debt Debtors Deceased Estate Depreciation Dereen Wallace Director Director Id Divorce Economic Update Economy Emily Kermac Employees Estate Planning Executor Fbt Federal Budget Federal Election Finance Finances Financial Advice Financial Plan Financial Update Franking Credits Government Grants Gst Holiday House Home Office Hybrid Unit Trust Individual Ownership Insolvency Insurance Insurance In Super Interest Rates Investment Investment Loan Investment Loans Investment Property Investments Janet Kohan Jobkeeper Jobmaker Joint Ownership Ken Burk Land Tax Lending Life Insurance Linda Hamilton Loan Repayments Loans Lvr Margin Loans Margin Scheme Market Update Medical Expenses Mortgage Mortgage Broker Mortgage Broking Mygov Negative Gearing Offset Account Overseas Gifts Parental Leave Paris Financial Pat Mannix Payg Payg Variation Pension Practice Valuations Private Wealth Property Property Development Rebecca Mackie Record Keeping Redraw Facility Refinance Renovating Research & Development Retirement Retirement Planning Retirement Savings Salary Sacrifice Scams Self Managed Superannuation Self Managed Superannuation Fund Seminar Shares Small Business Smsf Smsf Borrowing Smsf Property Smsf Self Managed Superannuation Fund Steve Golding Steve Wildes Strategic Business Structuring Structures Subdividing Property Succession Plan Superannuation Superannuation Fund Tanya Hofbauer Tax Tax Benefits for Super Tax Concession Tax Deduction Tax Investment Property Tax Losses Tax Offset Tax Planning Tax Savings Tax-Free Temporary Full Expensing Tenants in Common Tessa Testamentary Trusts Tfe Training Transition to Retirement Trust Trusts Ttr Will Working from Home
Home » E-News » Latest News

Trusts & Estate Planning

Trusts & Estate Planning

What is a trust?

A trust is a separate legal entity which holds assets, such as property or cash. and have a number of advantages, particularly from an asset protection perspective. They are very popular structures which are often set up by people during their lifetime.

How is a trust structured?

Trustee: Every trust has a Trustee. The Trustee can be a person (or persons), or a company. The role of the Trustee is to control the trust. They make all the decisions about what happens in the trust, including how to invest monies and how to pay money out.

Appointor: The vast majority of trusts also have a second position of control called an Appointor. The Appointor can fire the existing Trustee and replace them with a new one. Because of this, they are often the real power behind a trust.

Guardian: Some trusts also have a position called a Guardian. The Guardian has the job of approving certain decisions of the Trustee. Sometimes the Guardian is an independent person such as an Accountant.

What happens to the assets in my trust when I die?

Any money or property in a trust when you die stays in the trust. Because the trust is a separate entity to you, those assets are not in your name and do not pass by the Will. The trust survives you and continues on after your death.  What can be passed on, however, is control of the trust.

How do I pass control of my trust?

We need to look at all of the positions of control in a trust (Trustee, Appointor and Guardian) when passing on control of your trust. Ultimately, how control is passed depends on what the Trust Deed lets us do. However, in most cases we would need to:

  • Pass on Trustee control:
    • If the Trustee is a company, we need to make sure the shares of this company pass according to who you want to control the trust. This can be done in your Will.
    • If the Trustee is an individual, we need to appoint a new person to this role if the Trust Deed allows this.
  • Pass on Appointorship:
    • An Appointor can usually name someone to take over after them. This is usually done in a separate Deed. Where there are minor children, we like to look forward to plan for the trust ultimately ending up in their hands.
  • Pass on Guardianship:
    • A Guardian can also usually name a successor, in the same Deed as we name the successor Appointor. We may need to give careful consideration to who should be in this position.

Can I direct what happens to the assets in my trust?

The short answer is no. We can determine who will control your trust, but we cannot dictate how they will do that. Ultimately the decision about how the assets in your trust are managed and paid out, and even if the trust continues, are up to the new controllers. This makes the choice of controllers very important!

We can do a Statement of Wishes to the new controllers which sets out what you would like to happen, however ultimately this is only a guideline and is not binding on them.

Steve Wildes, Partner, Paris Financial

Follow me on Twitter

With thanks to Jessica Amberley at Legal Essentials for information provided.

Image courtesy of hyena reality at FreeDigitalPhotos.net


Tags: Capital Protection | Estate Planning | Steve Wildes | Structures | Succession Plan | Trusts |