Establishment of Trusts:

A trust may be created intentionally inter vivos or by Will. There are various different trust structures that are available and a person intending to establish a Trust Structure requires thorough and sound legal advice in order for an informed decision to be made about the appropriate trust structure to engage. Having a skilled and experienced Lawyer on your side may be immensely useful in establishing your trust structure to ensure the correct form and substance that suits your needs is catered for.

In order for a trust to be created, a few elements need to be satisfied.  First, there needs to be property or rights of a kind that can be the subject of a trust. Then, there needs to be a declaration of trust over property or transfer of property on trust by a person legally competent to create a trust. Following this, there usually needs to be certainty of property and objects so that the trust is administratively workable. Then, formal requirements need to be satisfied; this means that at trust deed needs to be drafted and correctly executed. Finally, there needs to be compliance with the appropriate laws and regulation in relation to trust, for instance the law against perpetuities and compliance with the rule against inalienability of income for longer than the perpetuity period.

In addition, appropriate checks and balances need to be performed to ensure that the trust deed complies with all relevant laws and regulations. The purported creation of a trust for an illegal purpose or otherwise contrary to public policy is void. Also, where the trust is created by transfer of property, the intending settlor must have taken the appropriate steps to effect the transfer so as to completely constitute the trust.  If all requirements for the creation of a valid trust are satisfied, usually (but not always), equity will not allow a trust to fail for lack of a trustee owing to disclaimer or death or another cause.  A qualified Trusts Lawyer will be of immense value in this regard in the creation and establishment of your trust deed.

There are a number of ways in which an express trust may be created.  Express trusts are created in one of two ways.  Firstly by declaration of trust, whereby the settlor (declarant) declares himself or herself to hold the property on trust for a beneficiary, beneficiaries or charitable purpose; or, secondly, by transfer of property by the settlor coupled with an intention to make the transferee the beneficial owner of that property (‘trust by transfer’).  Alternatively a person or corporation may at any time create a trust by a declaration to the effect that specified property or an interest in it is or will be held in trust from then on for a specified person or object, provided that that person or corporation is capable of disposing of that property, or that interest, by way of trust; and provided further that the declaration is made in the proper legal mode. 

If you need legal advice on establishing your trust structure, you may book an appointment with us, please call 02 9233 4048 or send an email to info@navado.com.au. 

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Tax or Accounting Advice. It does not take into account your objectives, financial situation or needs or 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.