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As with equitable interests, trusts exist as a creature of equity and are formalised agreement between the beneficiary and trustee. The form of a trust is generally divided between that of a bare trust, unit trust, hybrid trust, discretionary trust, resulting trust or constructive trust.

Bare Trust

Generally a bare trust controls the investment and return of capital and interest with strict controls such that any benefit derived is passed onto the beneficiary within a strict timeframe, and is within controls of taxation.

It may be the case that your superannuation is associated with a bare trust deed and may subsequently be controlled by the Superannuation Industry (Supervision) Act 1993. The power of a trustee, within a bare trust deed retains control.

Unit Trust

Generally a unit trust controls the management of a portfolio of stock exchange securities and is used to facilitate a larger purchase of exchange then one individual and to control the dissipation of profits which may eventuate.

Generally litigation related to unit trusts may arise in relation to insolvency and bankruptcy, in which case our Solicitors may be able to assist you in determining your rights and liabilities.

Hybrid Trust

A hybrid trust may generally take the form of a Discretionary and Unit Trust. The nature of the trust facilitates the splitting of the trust and benefit into distinct units, whilst also maintaining the discretionary powers of the trustees to release and manage profits pursuant to the Trust Deed.

It may be the case that litigation in relation to these trusts arises as a result of taxation liability, in which case our Accountants and Solicitors may be able to assist you in determining your rights and liabilities

Discretionary Trust

A discretionary trust is generally a trust under which the distribution of income or capital to beneficiaries is made at the discretion of the trustee. Until the trustee exercises its discretion, the beneficiaries generally have no interest in the property of the trust.

The control of the trust and the allocation of funds is generally within the control of the Trustee as determined by the Trust Deed. It may be the case that grounds for a dispute may arise in relation to the inconsistent exercise of power by the Trustee, and that they may have abused their fiduciary duty.

Resulting Trust

A resulting trust is a trust that arises because equity presumes an intention to create a trust, or in other words, an interest in property for the benefit of another.

A resulting trust can arise in a variety of different circumstances. A common scenario is where a person registers the property in another person’s name, despite it not being their intention for the other party to be the sole owner of the property.

If the parties are strangers, a resulting trust may be presumed. The case is less clear if the parties are in a close relationship. In this scenario the presumption of advancement may operate, under which it is presumed that the party gave the property to the registered owner.

For a resulting trust to exist, generally it would need to be shown on the balance of probabilities that it was the intention of the registered owner to hold the property in trust, in whole or at least in part, for the other party. Evidence suggesting that the property was gifted to the registered owner may assist in disputing the existing of a resulting trust.

Constructive Trust

Broadly speaking, a constructive trust is a remedy that the Court can impose to prevent a person from securing or maintaining an interest in a property that is considered unconscionable in the circumstances, given the contributions made by another person to that property.

A common scenario where a constructive trust may arise is where property is registered in the sole name of one party and another party makes contribution towards the property (eg making mortgage repayments or undertaking repairs). In the event that the registered owner dies without leaving any benefit in the property to the other party, the court may declare that an appropriate remedy would be for the surviving party to obtain an interest in the property or to receive some form of benefit to compensate them for their contributions to the property. 

At Navado, our team of Lawyers have the experience to consider a number of relevant areas of law in advising the best cause of action in relation to your complex dispute. It may be that your complex matter is not best pursued through a single area of law, and at Navado we turn our minds and experience to examining the number of areas which may be applicable and offer you a comprehensive and thorough advice. Additionally Navado has considerable access to a wide variety of expert counsel who may be able to assist you in the most focused and effective way regarding your complex matter. The combination of our in-house expertise, resources and counsel allows Navado to cover the field of law and advise you in relation to your complex matter, with a mind to advising you of causes of actions.

If you are in dispute over a trust and seek advice as to your rights and the options available to you, we recommend that you contact our firm on (02) 9233 4048 or send an email to info@navado.com.au and arrange an appointment to see one of our Complex Disputes & Litigation Solicitors. 


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This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.

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