Discretionary Trust Deed
Our service
- Your Discretionary Trust Deed, fully customised based on your answers application process
- Instructions on what to do next including stamping and opening a bank account
- Trust Schedule
- Memorandum of Wishes (if required) with instructions
- Minutes for corporate trustees (if required) with instructions
- Documents are delivered in PDF format with the option to download DOC, DOCX or RTF versions from our client area
How do I apply?
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You can find more information by visiting – what is a discretionary trust and setup a trust guide, setup a trust guide or explanation of roles in a discretionary trust.
Discretionary Trust Deed FAQs
If one person is to be the sole beneficiary and sole trustee then the trust is invalid, as a person cannot hold an asset on trust for their own benefit. However, eCompanies trust deed allows for a number of people related to the the primary beneficiary to also be named by the trustee and receive benefits.
If you are in the situation where only one person is named as the trustee and beneficiary in the deed, it could be worthwhile considering a corporate trustee. If you are in this situation we recommend discussing your needs with your accountant or lawyer for professional advice.
Setting up a family trust with a corporate trustee is straight forward with eCompanies. You perform the steps in the following order:
- Register a company as your corporate trustee if it isn’t already registered. Please note that as this company does not trade it will not require an ABN for itself.
- Form your discretionary trust deed, during the order process you will be asked for the name and ACN of the new company.
- Obtain an ABN for your trust, this will be in the name of your trustee company acting as trustee for your trust.
- Perform any necessary stamping of your deed.
A discretionary trust may make a family trust election. This is an optional declaration made to the Tax Office, notifying them of the desire to be treated as a ‘family trust’ for taxation purposes. The family trust status with the ATO provides simplification of the tax rules which apply to the trust.
As part of the election the trustee chooses a particular (test) individual around whom a family group is formed. This family group sets the boundaries around who the trustee can distribute to without adverse tax outcomes. As a result the trust may become less flexible and if distributions are made to someone outside the test individuals family group they can be subject to Family Trust Distribution Tax. This is basically the maximum individual tax rate plus the medicare levy.
Not every possible beneficiary of the discretionary trust must be named in the deed as a primary beneficiary. Our deed allows for a wide range of people related to a primary beneficiary to also be eligible for distributions. The eligible beneficiaries include:
- The spouse from time to time of a primary beneficiary;
- Any child, grandchild or great-grandchild of a primary beneficiary;
- Any relative of a primary beneficiary, including but not limited to; a parent, grandparent, brother, sister, uncle, aunt, nephew or niece of a primary beneficiary or a primary beneficiary’s spouse;
- The trustee of any trust or settlement of which any primary beneficiary is a beneficiary;
- Any other legal entity in which any a primary beneficiary has an interest, whether as a shareholder or director.