5 REASONS TO UPDATE YOUR FAMILY DISCRETIONARY TRUST DEED

Why do you need to update your family and discretionary trust deeds?

Whenever you set up your discretionary trust, it was for a particular reason. This may be for asset protection, tax reduction or for building family wealth.

In any case, similar to a cell phone, popular features must be upgraded. This something very similar with your trust deed. There are new features that must be replaced and these updates will benefit you.

WHY YOU NEED TO UPDATE YOUR TRUSTS?

The following are 5 key reasons why you need to update your family trust deeds:

Establish a Line of Appointors

The Appointor is one of the key players involved in a trust. They can change the legal administrator or trustee and the guidelines of the trust. Without a line of succession (somewhere around 2 generations long), there might be a problem if the appointor dies, becomes incapacitated or goes bankrupt. Your trust will be left without an appointor so updating your trust to include a line of successors for the appointer will be beneficial to you.

Successor Directors in a Trustee Company

Any trusts should have a corporate trustee. Having corporate trustee is critical to avoid losing family wealth. In the event that they don’t have one, the individual trustees are unprotected to any litigation.

It is important that the directors of a corporate trustee have successor directors to replace them in case that they become incapacitated or sick. This is also important in the event that directors die or are contested against.

In addition, the directors may leave or resign from their role and a relative or partner can replace them to guarantee the continuity of business. By updating the company constitution for your trustee company, you can include the ability or right for you to nominate success directors.

Keeping Your Trust Assets in Your Family Bloodline

Your existing trust is not created for bloodline beneficiaries and protection. Our attorney’s new discretionary trust deeds can give you that security. In case of separation, the updated trust deed can guarantee that your children’s de facto cannot get access to assets in the trust.

Easy To Use and Execute

The trustee should prepare a comprehensive trust distribution resolution every year. This should be in detailed and enumerates how earnings or income from the trust is to be divided among beneficiaries. Inability to properly distribute all income means that there will be 47% tax to pay. Such issues will be prevented with a modern deed. An updated trust deed that is linked into corresponding trust distribution resolutions will result to a more effective, faster and less prone to high tax penalties.

Big Changes Happening

Every State has set up a 2% land tax surcharge on property held in a discretionary trust that doesn’t obviously exclude foreign beneficiaries. Our upgraded, modern discretionary trust deed incorporates this and furthermore guarantees that the accounting principles changes. This may require costly “general purpose financial statements” from 1 July 2021. Both of these new measures that are presented recently could demonstrate extra cost to you.

HOW TO ACHIEVE THE BENEFITS OF MODERN TRUST DEED?

To accomplish these advantages for you, we should do the following for each of your deeds:

• Check each current deed and affirm which conditions need updating.
• Communicate with lawyers (your preferred asset protection and estate planning lawyers) to have a Deed of Variation arranged for every deed that requires an update.
• Set up for each updated deed to be marked or signed correctly.

COST

Trusts can be quite expensive to prepare, administer and restructure. But in your situation, call us to estimate your total price for this work plus GST for each deed that requires updating.

 

WHAT’S NEXT?

We believe that you should have the best family succession, asset protection and trust estate planning strategies designed for you.

Just email back affirming that you are glad as far as we’re concerned to accomplish this work for you. Contact us at Success Accounting Group today or email us if you have any further enquiries regarding this proposal to update your trust deeds.

Once we have your old deed(s) and know your line of succession of appointors, we will wrap up and update your family discretionary trust deeds. We are giving you this recommendation to upgrade and act to avoid problems in the event that litigation against you happens in the future.

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