Discretionary (Family) Trust

$165 (incl. GST)

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Overview

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Generate documents to establish a discretionary trust (also known as a family trust).  This type of trust provides the trustee with discretion as to how both income and capital amounts can be paid to beneficiaries that it believes is appropriate.

 

The following documents will be generated as part of the completed order:
    • The discretionary trust deed
    • Consent to Act as Trustee and related minutes
    • Instructions for next steps, including stamping of trust deed

 

How to order

To start ordering, simply follow these steps:

  1. Sign up to purchase documents as a PAYG member.
  2. You will receive an email with your login details.
  3. Once logged into our platform, select ‘Documents > Create New’.
  4. Select the document you require to start.
  5. Review & submit your order.
  6. You’ll have the order instantly delivered to you in less than 5 mins.

How to videos

Order a Discretionary Trust

This video explains the process in ordering a discretionary (family) trust on the Smarter SMSF platform.

Need assistance?

If you require help with ordering your SMSF documents, get in contact with us via live chat, by telephone on 1300 95 94 76, email team@smartersmsf.com.

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We recognise that practices come in all different shapes and sizes, and that’s why our Create document packages have been developed as a bundle to suit the size of your SMSF business. Our document packages start at $180 p/m for ANY 25 docs p/a and provide a substantial saving monthly.

To work out how many documents you might need for your business, try our document calculator that can help to determine the package that is right for you.

FAQs

What is a family trust?

A discretionary trust is a legal agreement between various parties (e.g. trustee(s), settlor, appointor) in which the trustee is given the power/discretion to decide which of the beneficiaries are to benefit from the trust, either by way of income and/or capital.  A discretionary trust can help protect family assets and provides absolute flexibility to distribute both income and capital amongst members of a family for tax optimisation purposes.

What is the role of the settlor?

The settlor is usually someone unrelated to the beneficiaries of the trust, such as an accountant, lawyer or close family friend.  For tax reasons, the settlor should not be a beneficiary of the trust. The settlor usually has no further involvement with the trust after the initial settlement (i.e. settled sum).

What is the role of the appointor?

The appointor is the ultimate controller of the trust as the appointor generally has the power to remove and appoint the trustee and determine the trustee’s remuneration. Generally, the person who wished to establish the trust is nominated as appointor, either alone or together with a relative or associate (e.g. husband and wife).  Where multiple appointors are nominated to act unanimously the trust assets can be protected and control of the trust can be retained in case of bankruptcy, divorce and other similar circumstances.

What is the role of the trustee?

The trustee is the person / legal entity responsible for administering the trust in accordance with the terms of the trust deed.  The discretionary trust deed generally gives the trustee broad investment powers (which can be added to if necessary) and the absolute discretion to make decisions and exercise powers in relation to the trust assets without having to give any reasons.  The trustee is required to comply with the terms of the trust deed, Trustee Act (or similar legislation) in the relevant State or Territory of Australia where the trust is established and trust law.  The trustee may be one or more individuals or a company (pty ltd) specifically setup to act as trustee.

What stamp duty is payable upon establishing the trust?

The level of stamp duty payable on establishment of a trust will vary based upon each State or Territory and in some circumstances also considers where you intend to own property or run a business. To understand the requirements for stamping and any applicable stamp duty fees that may to trust deeds in different states of Australia, refer to the following overview: https://smarter-smsf.helpscoutdocs.com/article/142-stamp-duty-requirements-for-trusts

What are the types of beneficiaries?

Companies and individuals can be beneficiaries of a trust, and they’ll fall into one of the following categories:

  • Primary Beneficiaries – the primary beneficiaries are those whom the trust specifically names. In a trust set up for a family, this will most often be the husband and wife, de facto partners, etc. The relationship with the primary beneficiaries will typically define the classes of the beneficiaries (see below).
  • General Beneficiaries – these are the people that fall within a particular class of beneficiary depending on their relationship with the primary beneficiaries. For example, if a trust deed stated that general beneficiaries included brothers, sisters, children, grandchildren or other descendants, whether a person falls into the class of general beneficiaries depends on their relationship with the primary beneficiaries.
  • Income Beneficiaries – Money that is generated by the trust (for example, through interest earned on trust money in a term deposit or rent earned from a residential property owned by a trust) can be distributed to a beneficiary.
  • Capital Beneficiaries – Capital beneficiaries may receive distributions of capital from a trust but not any income that is earned by trust assets.
  • Default Beneficiaries – distributions are made by default to these beneficiaries unless the trustee decides they’d like to distribute it to others.

Samples & References

Discretionary (Family) Trust – Sample Document

View Sample Document