What is a Family Trust?

When your family’s wealth grows beyond simple savings, you need to start thinking about protection and tax planning. At that point, many families consider setting up a family trust. This structure can help safeguard assets from potential claims and make it easier to manage investments, including property held across Australia.

And if you’re running a family business, it also helps keep your personal assets separate from the risks that come with day-to-day operations.

This guide explains how a family trust in Australia works. We’ll cover setup processes, taxation rules, benefits and risks for your specific situation.

Let’s explore whether this trust structure suits your family’s wealth planning goals.

A family trust is a legal structure where a trustee holds and manages assets for the benefit of family members. Put simply, it’s a legal arrangement where one party (the trustee) owns assets on behalf of others (the beneficiaries).

The trust deed establishes all the rules. This legal document spells out who can benefit from the trust, how the trustee makes decisions, and what control mechanisms apply. When you set up a family trust, the deed becomes the foundation document that courts and the Australian Taxation Office refer to if disputes arise.

Most family trusts in Australia operate as discretionary trusts. This means the trustee decides each year how to distribute income and capital among family members. The main job is managing family wealth with flexibility for tax purposes and estate planning.

The reason families choose this structure is the control it provides over asset protection, income distribution, and long-term wealth transfer to future generations.

How Does a Family Trust Work in Australia?

A family trust works through a trustee who legally owns assets on behalf of beneficiaries. The trustee controls trust assets and decides how income and capital are distributed to family members each year. Beneficiaries receive distributions based on those trustee decisions, which directly affect their personal tax obligations.

You know the biggest advantage? The trustee’s power to split income across family members annually creates tax planning opportunities (this happens more often than you’d think).

Let’s break down each role to understand how this works.

Trustee Role

The trustee is the person or company that legally owns and controls all trust assets. Property titles, bank accounts, and investment statements all show the trustee’s name, not individual family members.

The trustee must act in the beneficiaries’ best interests and follow the trust deed requirements. They make decisions about investments, expenses, and who receives distributions each year. However, trustees face personal liability for breaches of duty or non-compliance with tax legislation.

If a corporate trustee structure is used, the company acts as trustee. This provides better liability protection than an individual trustee arrangement.

Beneficiary Role and Family Members

Beneficiaries are the family members who can receive money or assets from the trust. They’re named in the trust deed, which defines who belongs to the family group for tax purposes.

Here’s the key difference: beneficiaries don’t control trust assets directly. Instead, they only receive income or capital when the trustee chooses to distribute it, with those decisions made each year before the 30 June deadline.

Family Group and Family Control Test

The family group is the test individual plus their relatives who can legally benefit from the trust. This includes the test individual, their spouse, parents, grandparents and all lineal descendants.

Control is assessed by examining who can appoint or remove trustees. The family control test determines eligibility for tax concessions under relevant Australian tax legislation. The Australian Taxation Office (ATO) uses this test to verify that the right family group maintains control.

Trust Deed

The trust deed is the foundation document that sets out all the rules for how your trust operates. The particular trust deed for your family trust specifies beneficiaries, trustee powers, distribution rules and control mechanisms.

Good to know: Courts and the ATO refer to the deed when disputes arise. That’s why it’s important to get your trust deed carefully drafted by seeking professional legal advice from the start.

Distribute Income and Distribution Process

The distribution process gives you until 30 June each year to decide who gets what income. Trustees prepare distribution minutes each financial year, documenting who receives trust income and capital.

After the financial year ends, trust income distributions are reported in tax returns. Keeping clear written records of the trustee’s decisions helps avoid ATO disputes and makes the distributions legally effective.

Without those records, any income not properly distributed may be taxed to the trustee at the highest marginal rate.

What Is the Structure of a Family Trust?

A family trust structure consists of four main components: the trustee, beneficiaries, appointor and trust assets. These elements work together to create a legal framework for managing family wealth. Each part plays a specific role in how the trust operates.

Here’s a detailed description of all the elements:

Trustee Structure: The trustee can be an individual or a company acting as the legal owner of trust assets. Corporate trustees provide liability protection and continuity beyond individual trustees’ lifespans, while individual trustees expose personal assets to trust liabilities.
Corporate Trustee: A corporate trustee is a company registered with ASIC that acts as trustee for the family trust. Directors control the company, which in turn controls trust assets and distributions. This structure provides limited liability protection for managing the trust long-term.
Beneficiary Classes: These are groups of people eligible to receive distributions, usually family members and related entities. Common classes include primary beneficiaries, children, grandchildren and associated trusts or companies. The trust deed defines who belongs to each class.
Settlor Role: The settlor establishes the trust by providing an initial settlement sum, often just $10 to $100. However, they can’t be a beneficiary or hold ongoing control. Usually, an independent third party, like an accountant or lawyer, takes this role.
Trust Assets: Trust assets include property, investments, business interests and cash held by the trustee for beneficiaries. This can include residential property, commercial premises, shares and business structures.
Control and Decision Authority: The appointor controls who acts as trustee and holds ultimate power. The trustee makes day-to-day decisions about investments, expenses and annual distributions. Trust deeds are subject to general law and any applicable provisions of the must comply with Trusts Act 1973 (Qld), which governs how trusts operate.

In our experience, the most successful structures balance control between the appointor and trustee. We’ve seen families benefit when they understand each role before establishing trust, rather than fixing structural problems later.

Why Should People Set Up Family Trusts?

People set up family trusts to protect assets, manage tax more effectively, and plan how wealth is passed on.

Most families don’t consider a family trust until they’re dealing with a large tax bill, legal risk, or estate planning. In practice, families use trusts to hold assets away from personal risk and to gain more control over how income is taxed and distributed. They provide asset protection from creditors, business risks and individual liability claims.

Think about it this way: when you own family assets personally, you’re exposed to every risk in your life. Well, a properly structured family trust creates a legal split between you and your wealth.

Now, we’ll walk through the main reasons families choose this trust structure.

Asset Protection

The best part about asset protection through family trusts is keeping your wealth separate from personal risk. Trust assets are owned by the trustee, not individual family members personally (something most people overlook until it’s too late).

When a family trust is set up properly from the start, personal creditors usually may not reach trust assets depending on control, timing, and facts. This also means that if you run a family business, business creditors can’t automatically claim personal assets like your home.

These protections prove to be the strongest when the trust is put in place well before any financial or legal issues arise.

Income Distribution

Income distribution flexibility means you can adapt your tax strategy every single year based on tax effectiveness. Trustees can distribute income to beneficiaries in different tax brackets each year.

Let’s think it easy: if one family member earns $180,000 and another earns $45,000, the trustee can distribute income to the lower earner. This approach delivers real tax benefits for families with varying income levels through the family trust for tax planning.

Estate Planning

Estate planning through family trusts means most trust assets avoid probate, subject to control arrangements, when you pass away. This way, family assets remain within the trust structure rather than passing through deceased estates to future generations.

Control mechanisms ensure intended beneficiaries receive wealth according to family wishes. Believe it or not, unlike wills, which can face challenges and disputes, family trusts continue operating according to the trust deed’s terms. This helps prevent future family disputes over inheritances.

Families dealing with complex estates often find family trusts simpler than traditional succession planning through challenging a will in Queensland.

Business Ownership

Running your family business through a family trust means separating business debts from your personal assets. A family business operated through this trust structure protects family assets from operational risks.

Apart from that, profits can be distributed to family members rather than retained in one entity. This provides flexibility for succession planning and often results in better tax advantages. Plus, the separation helps protect assets for future generations.

Who Should Use a Family Trust?

Family trusts work best for business owners, property investors and families with significant investment income or shared assets. Wondering why?

Well, setting up a family trust suits people with income-producing assets, business interests or long-term wealth planning goals. The trust structure functions as an investment or trading vehicle that provides flexibility ordinary ownership can’t match.

Here’s the breakdown of those who should use a family trust:

Business Owners: If you run a family business, a discretionary trust helps limit how far business risks can reach. It allows income to be shared with family members at lower tax rates, while also helping protect personal assets, like the family home, from business creditors.
Property Investors: Investment properties held within family trusts let you allocate rental income to beneficiaries with lower marginal rates each financial year. You’re protecting assets while planning long-term wealth transfer without forced property sales.
High-Income Earners: Your salary stays taxed at your rate, but investment returns can flow through a family trust structure. Say you earn $200,000 and your spouse earns $50,000. Your $10,000 in share dividends could be distributed to your spouse, who pays tax at 19% instead of your 45% rate. That’s real tax effectiveness in action.
Families With Shared Assets: One centralised family trust prevents disputes by establishing clear governance rules in the trust deed. You’re coordinating family wealth strategy across multiple beneficiaries without confusion.
Long-Term Investors: Building diversified portfolios within a family trust structure works for multiple generations. The structure adapts to changing tax legislation and family needs down the track.

Pro tip: From our experience, family trusts deliver the best results when you have at least $200,000 in assets and genuine income splitting opportunities across family members. Otherwise, the setup and compliance costs might outweigh the tax benefits.

How Do You Set Up a Family Trust in Australia?

Setting up a family trust in Australia involves seven key steps, starting with choosing your trustee type. The process includes establishing the trustee, creating legal documentation and registering with the Australian Taxation Office.

Each step builds on the previous one to create a legally valid trust structure. Also, you’ll need professional advice from legal or financial advisors to ensure everything complies with applicable tax legislation.

Now, here’s the complete setup process.

Step 1: Decide on a Corporate Trustee or Individual Trustee

Your first decision determines how much personal risk you’re willing to carry as trustee. Corporate trustees limit personal liability and provide better governance for family wealth structures. In contrast, individual trustees expose personal assets to trust liabilities but incur costs initially.

When making this choice, consider your asset size, risk profile and long-term family goals. If you’re holding substantial family assets or running a family business, a corporate trustee usually makes more sense. The extra setup cost pays off through better legal considerations and protection.

Step 2: Set Up the Corporate Trustee (If Needed)

Once you’ve decided on a corporate trustee, the next step is registering the company with ASIC. This creates a separate legal entity that acts as the legal owner for trust purposes.

After registration, appoint directors and shareholders who will control the trustee company’s operations. You’ll also need to prepare the company constitution and governance documents to meet ASIC requirements. This corporate structure becomes the foundation for managing all trust assets.

Step 3: Create and Execute the Trust Deed

The trust deed is where you document exactly who can benefit and how the trust operates. This legal document becomes the foundation for all trust operations. Draft a trust deed specifying beneficiaries, trustee powers and distribution rules for your family group.

Along with that, include appointor provisions and control mechanisms that protect family interests long-term. Execute the trust deed carefully with proper witnessing and legal formalities to ensure validity.

Note: It’s worth working with reputable options like Securator Legal for family trusts to ensure your particular trust deed meets all legal requirements under Queensland’s trust law.

Step 4: Appoint the Trustee and Key Roles

Now that your deed is executed, you need to record who’s acting in each role formally. Formally appoint the family trustee entity or individual through written resolution or deed provisions.

At this stage, document the appointor’s role and succession provisions for long-term control continuity.

We strongly recommend recording all appointments and authority levels in trust minutes and records. These documents prove who has legal authority to make decisions and control the family trust structure.

Step 5: Apply for a TFN and ABN (If Needed)

Getting your tax registrations sorted early means you can start earning income and claiming deductions immediately. Register the family trust with the Australian Taxation Office and obtain a tax file number for reporting purposes.

Additionally, apply for an ABN if the trust will conduct business activities or claim GST credits. Link the family trustee details to trust registration for all future compliance obligations. The ATO needs to track the trust as a separate legal entity for tax purposes.

Step 6: Open a Trust Bank Account

A trust bank account must be opened in the trustee’s name with “as trustee for” the trust name. So, open the account in the trustee’s name “as trustee for” the family trust structure.

Once opened, link the account to the trust ABN and tax file number for proper tax reporting. Maintain separate accounts for trust transactions to avoid mixing with personal funds. This separation is important for protecting assets and meeting compliance requirements.

Step 7: Finalise Legal Documentation and Records

After completing the setup steps, you need to organise your documents and establish ongoing compliance systems. Store the executed trust deed, ASIC registrations and trustee appointment documents securely.

Finally, establish a minute book for recording trustee decisions and annual distribution resolutions. Set up an ongoing compliance calendar for tax returns, ASIC fees and trust administration. The more organised your record-keeping from day one, the easier compliance becomes each financial year.

What Are the Benefits of a Family Trust?

Family trusts deliver five main benefits: tax flexibility, control, succession planning, wealth protection and long-term planning capability. These benefits work together to create a flexible structure for managing family wealth across generations. The trust structure provides advantages that direct personal ownership simply can’t match.

We’ll take a closer look at how each benefit actually works in practice.

Tax Flexibility

Family trusts let you distribute income to beneficiaries in the lowest tax brackets to minimise overall family tax. You retain the flexibility to adjust distributions annually based on changing family circumstances.

For instance, if your adult child is studying and earning minimal income this year, they can receive more trust income taxed at lower rates.

What’s more, where the deed and resolutions support streaming, you can stream different types of income to different beneficiaries for better tax outcomes. Franked dividends might go to one beneficiary while capital gains go to another based on their tax positions.

Control Structure

The appointor controls trustee appointments and maintains family control over trust assets. Meanwhile, the trustee makes operational decisions about investments and distributions within trust deed parameters.

Control remains within the family group while separating legal ownership from beneficial interests. This structure means family members benefit from assets without the risks of direct ownership.

Succession Planning

Did you know that wealth transfers to the next generation without probate delays or estate administration costs? The family trust continues operating across multiple generations with proper appointor succession planning.

Here’s what this means:

No probate process after death
Assets stay within the trust structure
Can significantly reduce probate-related disputes
Beneficiaries receive wealth according to the deed

At the end of the day, this prevents future family disputes over inheritances. Plus, your assets stay protected within the trust structure rather than being divided through contested estate battles.

Wealth Protection

Assets held in a trust are generally kept away from personal ownership, which means individual creditors usually can’t reach them. As a result, business risks or personal liabilities don’t automatically put your trust property at risk.

Not only that, but proper structure also protects your assets from relationship breakdowns and bankruptcy proceedings. When set up correctly, the trust creates a legal barrier between family wealth and personal financial problems.

Long-Term Planning

A centralised structure manages diverse asset portfolios across multiple beneficiaries efficiently. You get flexibility to adapt distributions and control as family circumstances evolve over decades.

The trust provides a foundation for multi-generational wealth management and family governance frameworks. This long-term approach protects family assets for future generations rather than just the current one.

What Are the Risks of a Family Trust?

The main risks of a family trust are cost, complexity, tax mistakes, and the potential for family conflict.

Family trusts aren’t perfect, and the wrong structure can cost you thousands in setup fees and ongoing issues. That said, we understand that setting up a family trust in Australia feels like a big commitment, and honestly, it comes with real challenges.

Let’s talk about the risks you should consider:

Setup Costs: Legal fees for trust deed drafting typically range from $1,500 to $5,000, depending on complexity. On top of that, a corporate trustee setup adds ASIC registration fees and company establishment costs. When you factor in initial advice from seeking professional advice and financial advisors, the upfront investment in the trust structure can feel substantial for families just starting out.
Ongoing Compliance: Annual tax returns are required even when the family trust has no trust income or distributions (not the most exciting task, admittedly). Apart from that, ASIC fees for corporate trustees must be paid annually to maintain registration. The trustee must also prepare distribution minutes and maintain proper records each financial year, which means ongoing accountant fees regardless of whether you distribute income to family members.
Legal Complexity: Trust deeds contain complex legal terms that require professional interpretation and ongoing legal advice. What’s more, mistakes in trust administration can invalidate distributions or cause tax consequences under applicable tax legislation. Changes to trust terms often require court orders or complex amendments, so the legal entity created at setup might need costly updates as tax law changes.
Tax Compliance Risk: Incorrect distributions can result in the trustee paying income tax at the highest personal marginal tax rate on undistributed trust income. The ATO scrutinises family trusts for tax arrangements and can challenge structures lacking a commercial purpose, but the real risk is Part IVA, section 100A, and adult beneficiary reimbursement arrangements under the tax legislation. Breaching family trust election rules means paying 47% top marginal rate (including Medicare levy) tax on amounts distributed outside the family group to eligible adult beneficiaries, which hits family assets hard financially.
Family Disputes: Disagreements over income distribution or control can damage family relationships and require legal intervention to resolve. Beneficiaries may challenge the trustee’s decisions that they perceive as unfair or improper regarding family assets. Control battles over the appointor role can fracture families, and future family disputes over trust control happen more often than most families expect when setting up a family trust structure initially to protect assets.

From our experience working with Queensland families, these risks are manageable with proper planning and seeking professional legal guidance. However, families should weigh these challenges against the tax benefits before committing to a family trust.

How Are Family Trusts Taxed in Australia?

Family trusts in Australia are taxed by passing income to beneficiaries, who then pay tax at their own rates. More specifically, trust income and capital gains flow through to beneficiaries who pay tax at their marginal rates under the tax system.

Now, the trustee is responsible for lodging the trust’s tax return and making sure everything is reported correctly to the ATO. At the same time, decisions made before 30 June determine who pays tax on that year’s trust income, so getting these details right is central to how trust tax works.

We’ll explain how these systems work below.

Family Trust Distribution Tax (FTDT)

Family Trust Distribution Tax is a penalty tax that applies when a trust with a Family Trust Election distributes income or capital to someone outside the family group. In these cases, the trustee pays the top marginal tax rate (including Medicare levy) at 47% on the amount distributed, regardless of the recipient’s tax rate.

FTDT doesn’t apply to ordinary distributions made within the family group.

Under the general trust tax rules, income that is properly distributed is taxed to the beneficiaries at their personal rates, not to the trust. To achieve this outcome, the trustee must make and document distribution decisions before 30 June.

However, if the income is not validly distributed by year end, the trustee is taxed on that income at the highest marginal rate.

Capital Gains Tax (CGT)

Capital gains tax applies when a trust sells assets such as property or shares for more than their cost base. Any capital gains can be allocated to beneficiaries and taxed in their hands at their marginal rates, provided the trust deed allows this and the distributions are properly made.

On the bright side, trusts can access the 50% CGT discount on assets held longer than 12 months. This provides real tax advantages when selling investment property or shares that have appreciated.

Capital Gains

What happens when your trust sells an investment property for more than it paid? The trust makes a capital gain when it sells an asset for more than its cost base, calculated using the purchase price, eligible costs and improvements, less selling expenses.

After applying any losses and discounts, the trust includes the net capital gain in its assessable income and can distribute it to beneficiaries for tax purposes.

Beneficiary Taxation

Beneficiaries include their share of trust income in their personal tax returns each year. They report this on their personal tax return to the ATO. Tax rates depend on each beneficiary’s total taxable income and marginal tax bracket.

Bear in mind, minors receiving unearned income may be taxed at penalty rates under special rules.

ATO Compliance

Meeting ATO compliance requirements helps avoid penalties and ensures the trust operates correctly. Trustees must lodge an annual tax return by the relevant due date, which depends on whether a tax agent is used.

Distribution decisions must be made by 30 June each financial year, with proper records kept in line with the trust deed. Trustees are also required to maintain accurate records and respond to ATO information requests.

Record-Keeping Requirements

Family trusts must keep financial and tax records for at least five years. This includes distribution resolutions, financial statements and tax returns, while the trust deed should be retained for the life of the trust.

Keeping clear and complete records helps manage ATO audits and supports trustee decisions if disputes arise.

What Is a Family Trust Election?

A Family Trust Election (FTE) is a generally irrevocable tax election that ties a family trust to a specific family group for tax purposes. It is lodged with the ATO and nominates a test individual, whose family defines who the trust can distribute to without triggering penalty tax.

Making an FTE allows the trust to access certain tax concessions, including franking credit streaming, and can improve tax effectiveness under Australian tax law. However, it also limits who the trust can distribute to and can restrict future flexibility severely with the loss of ability to distribute outside group permanently.

In some cases, an interposed entity election may also be required, which has its own long-term implications. While these elections can provide real tax advantages, they can also create problems if not carefully planned. So here’s what you need to understand.

Family Trust Election Rules

Do you know what happens when you make a family trust election and can’t change your mind? The trust must nominate a test individual, whose family group determines who it can distribute to without triggering penalty tax. The election is made by lodging Schedule 2F with the trust’s annual tax return.

Understandably, families want flexibility, but once a Family Trust Election is lodged, it generally can’t be revoked. From that point on, the trust is tied to distributing within the family group under the tax law.

Family Group Rules

Family group rules determine who a trust may distribute income or capital to without triggering Family Trust Distribution Tax once a Family Trust Election is in place.

The family group is defined by reference to the test individual and includes close family members, like spouses, parents and lineal descendants. It can also include certain related entities where the required elections have been made.

This group is limited to recognised familial and legal relationships, so informal arrangements or commercial associations fall outside its scope.

Family Control Test Requirements

The family control test applies for specific tax provisions, not all trusts and looks at whether the test individual’s family actually controls how the trust is run and how income is distributed. This control is usually measured by who has the power to appoint or remove the trustee under the trust deed.

For that reason, the appointor role must sit within the test individual’s family group. If that control is lost, the trust can fail the family trust election rules and face negative tax consequences.

What Is the Difference Between a Family Trust Structure and Others?

Family trusts in Australia differ from other structures in ownership model, control mechanisms and how beneficiaries pay tax for tax purposes. This difference influences how your assets are protected and managed over time.

Here’s how a family trust compares to alternate investment structures:

Structure Type	Ownership Model	Control	Tax Treatment	Compliance Level	Typical Use Case
Family Trust	Assets owned by the corporate trustee as the legal owner for the beneficiaries	Trustee + appointor	Trust income and capital gains are distributed to beneficiaries who pay tax at their personal marginal tax rate	Medium	Family wealth structuring, distribute income to family members
Personal Ownership	An individual owns family assets directly	Individual	Taxed at personal marginal tax rate on personal tax return	Low	Simple personal asset ownership
Company	A company is a separate legal entity owning assets	Directors and shareholders	Taxed at the company tax rate	Medium	Trading businesses, family business operations
SMSF	Fund owns assets	Trustees for members	Superannuation tax regime	High	Retirement savings
Unit Trust	Trustee holds assets for unit holders	Trustee + unit holder rights	Income distribution based on unit holdings	Medium	Joint ventures, investment or trading vehicle
Discretionary Trust	Trustee owns assets for beneficiaries	Trustee discretion to distribute income	Trust income and capital gains at the trustee’s discretion for tax purposes	Medium	Flexible income distribution structures

Family trusts provide more income distribution flexibility to family members than companies, but require more compliance for managing family assets and family business interests. The discretionary trust structure lets you distribute income to beneficiaries in lower tax brackets for tax effectiveness and tax savings.

Unlike SMSFs, family trusts aren’t restricted to retirement savings and can hold any asset type as an appealing investment structure for tax advantages. Unit trusts lock income distribution to unit holdings, while discretionary trusts allow the corporate trustee to distribute income annually based on taxable income levels.

Making the Right Choice for Your Family

Now that you understand how family trusts work, the question is whether one suits your situation. Family trusts offer flexible wealth management for managing assets but require proper setup and ongoing compliance with applicable tax legislation. They suit families with investment assets, family business interests or long-term wealth transfer goals for future generations.

Seeking professional advice ensures your family trust structure aligns with family objectives and helps you protect assets effectively. Legal or financial advisors who understand the tax system can provide tax advice specific to your circumstances. The tax benefits, tax savings and asset protection benefits need to outweigh the costs and complexity for your family members.

The legal document created during setup serves as your foundation for decades, so getting the particular trust deed right from the start matters. Along with this, a proper structure helps protect family assets from debt recovery procedures if financial problems arise.

Frequently Asked Questions (FAQs)

How much tax does a family trust pay?

A family trust usually doesn’t pay tax itself. It’s commonly paid by the beneficiaries who receive the income or capital gains. If income is distributed, beneficiaries pay tax at their own rates. But if income isn’t distributed, the trustee pays tax at the highest marginal rate. Plus, there’s no fixed tax rate for a family trust. Rather, it depends on how income and gains are distributed.

Does the ATO crack down on family trusts?

Yes, the Australian Taxation Office (ATO) is closely monitoring family trusts to ensure compliance with tax laws and to prevent tax avoidance. They focus on complex arrangements that misuse the tax system, emphasising proper trust management and reporting practices.

Do you have to do a tax return for a family trust?

Yes, in Australia, a family trust must file a tax return. The trustee is responsible for lodging a trust tax return with the ATO each year, reporting the trust’s income, deductions, and income distribution to beneficiaries. The tax liability often passes to the beneficiaries, who report this income on their personal tax returns. If the trust retains any income, it may be liable to pay tax on that undistributed income.

Can my salary be paid into a family trust?

Your salary as an individual cannot directly be paid into a family trust for tax purposes. Further, the personal services in income rules may apply if you try to push contractor income into the family trust. However, a family business can distribute its profits from business and investments to beneficiaries.

Can I put a house into a family trust?

Yes, you can transfer the ownership of a house into a family trust. This might be done for asset protection or estate planning purposes. Get advice before doing so as it usually triggers stamp duty or transfer duty and can have CGT implications.

Can an accountant set up a family trust?

Yes, an accountant can assist in setting up a family trust using a lawyer or an incorporation service. It’s important to also involve a lawyer to ensure the trust deed is legally sound of you have special requirements or you have a complex business structure. Tax lawyers are often engaged when a trust is involved in a complex structure.

Are family trusts protected from divorce?

In a divorce, assets within a family trust might be considered during the settlement process as a financial resource. However, the protection they offer can vary based on individual circumstances and legal decisions.

Are family trusts protected from creditors?

Family trusts offer a level of protection against creditors, but this depends on how and when the trust was set up and how it’s been managed. Some clawbacks can occur for pre-bankruptcy gifts, for example.

Should I hire a lawyer to set up a family trust?

Yes, it is highly advisable to hire a lawyer when creating a family trust. Establishing a trust involves intricate legal documentation, including drafting the trust deed, which is the core document outlining how the trust will operate.

A lawyer ensures that the trust is set up correctly and complies with legal requirements. They can also provide valuable advice on the structure of the trust, tax implications, and how to best protect assets and the interests of beneficiaries.

Given the complexities and potential legal and financial ramifications of incorrectly setting up a trust, professional legal guidance is crucial for peace of mind and to safeguard against future disputes or compliance issues.

Contact us today for any questions about setting up your family trust.

Disclaimer

This article is for general informational purposes only and does not constitute legal advice. Every individual’s circumstances are unique, and the information provided may not apply to your specific situation. Securator Legal does not accept responsibility for any loss, cost, or damage incurred as a result of reliance on the material in this article. For tailored advice, we strongly recommend consulting a qualified legal professional before making any decisions regarding taxation, trusts, asset protection and estate planning.