Waiting for the day** where there is a maintaining trust records

It’s surprising how often we are provided with an original trust deed for a trust that’s been around for 10 or 15 years and are asked to give advice on the terms of the trust, only to have it turn out later that there were subsequent deeds of variation or resolutions which amended the terms of the trust, which everyone had lost or forgotten about.

As a practical tip, clients who are establishing a trust should have some form of trust register or trust folder in which they store copies of all of the trust deeds, trust variations, trust resolutions and any other documents which may impact on understanding what rights and responsibilities attach to that trust.

We also need to understand that beneficiaries can make unilateral decisions, such as deciding to renounce an interest as a beneficiary of a trust.

If an individual who is a beneficiary issues a disclaimer or a renunciation, which says that notwithstanding the terms of the trust deed they have chosen not to be a beneficiary of the trust anymore, that will impact on their standing from a family law perspective, bankruptcy perspective and a tax perspective.

As usual, please make contact if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from the George Michael song ‘Waiting for that day’.

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Trust structuring checklist - vol I**

Over the years we have developed a checklist of some of the key issues that should be considered whenever establishing or varying a discretionary trust.

Obviously, the relevance of each issue depends on the exact circumstances of the client and over this and the next two posts, each of the 21 issues in our non-exhaustive list will be summarised.

The various issues are not listed in any particular order of priority and the first seven items on the checklist are as follows:

1. Who is the trustee of the trust?
2. If the trustee ceases to act, do their powers pass to anyone else, and if so, who?
3. Is the trustee an individual or a company?
4. If the trustee is a company, who are the directors?
5. Is there a default distribution of the income and capital of the trust to certain beneficiaries?
6. Does the trust deed restrict the range of beneficiaries who can receive income or capital distributions?
7. Does the trustee need consent/approval of any other person for distribution?

** for the trainspotters, a classic song from George Michael album ‘Listen without prejudice (Vol. 1)’, namely ‘Freedom 90’.