Trust Law

What is a Trust?

Trusts, when properly implemented, can provide many benefits from protecting family wealth to minimising tax implications.

Trusts are unlike companies, where a trust is not a separate legal entity – except when registering for tax. Generally speaking, trusts are established with the intention that the trustee will hold certain asset(s), including property, for the benefit of the beneficiary/ies.

However, there are a variety of different trusts available, each designed to serve a unique purpose and with different regulations and rules governing them. Therefore, it is important to be able to understand how each type of trust operates so that you can choose the one best suited to your life circumstances.

It is important to get expert legal advice if you are looking to set up a trust to ensure it is executed and managed correctly. Our commercial lawyers take on a holistic approach when helping you decide which trust model is most suited to your objectives and life circumstances.

At Ivy Law Group, we can also assist with ensuring compliance with trust law as well as with handling any disputes in relation to a trust in question, or the actions of the trustee.

Trusts are also a commonly used business structure. See ‘Business Structuring and Asset Protection’ to learn more about this.

Diffrent Types of Trusts Available

Our Sydney commercial lawyers can assist you with a variety of trusts, including:

  • Discretionary (family) trusts, which is the most commonly used form of trust and used mainly by families. This is because discretionary trusts do not have a defined entitlement for beneficiaries, rather the entitlements are decided each year by the trustee, and can be attractive to families considering minimising their overall tax implications though mechanisms such as income streaming. This allows for flexibility in distributing trust income and capital, as well as asset protection and it offers an attractive lower marginal rate of tax.

  • Unit trusts which are often used by businesses, or entities considering investment. With this type of trust, the assets are held on trust for the beneficiaries (unit holders). The units are similar to shares in a company, especially where unit holders have the benefit of having a defined interest in the asset, which, much like shares, can be transferred or reacquired by the trustee.

  • Testamentary trusts, which are created under a Will with the objective that the trustee (often, the executor of the Will) will hold and manage the will-maker’s assets (estate) to be distributed, in the form of income or capital, to the beneficiaries according to their Will. This, of course, does not come into effect until after their death. Testamentary trusts provide many benefits including greater asset protection, income tax benefits, superannuation and life insurance interest. You can learn more in our Testamentary Trusts Fact Sheet.’

  • General trust law advice. Our commercial lawyers can assist with any general trust law queries you may have, which includes advising on:
    • A suitable trust model for your circumstances
    • The responsibilities of trustees and appointors (settlors)
    • The functionality of trusts
    • Required compliance with relevant trust regulations
    • Implications that the relevant trusts may have on any family law issues and estate planning
    • Risk minimisation and management for companies, as well as asset protection.

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How Ivy Law Can Help

If you are interested in establishing a trust, our commercial lawyers are here to answer and advise on questions you may have. Please get in touch on 02 9262 4003 for a confidential discussion or submit an online enquiry to get started.