Is it the end of the trust as we know it?**

A critical aspect of every trust is the period for which a trust can last – often referred to as the perpetuity period or the vesting day of the trust.

As a rule of thumb, any review of a trust deed that we perform always starts with checking the exact vesting date. We have had countless situations where this review has in fact led to the discovery that the trust itself has ended (in one instance, almost 7 years earlier).

Generally, so long as steps are taken before a trust vests, it should be possible to extend the life of a trust to the maximum period allowed at law (ie the perpetuity period), which in most cases is 80 years – noting that Queensland upped the rules in that state back in 2023 to 125 years.

In some cases, it may also be possible to extend the life of the trust so that it complies with the laws of South Australia – as has long (no pun intended …) been the case, there is effectively an unlimited perpetuity period available via South Australian law.

** For the trainspotters, the title today is riffed from REM’s song of the same name, from 1987, listen here:

Get Up** to speed: companies acting as trustees of wills

One issue that comes up regularly is whether a company can act as an executor and trustee of a will.

While there are a number of issues that need to be taken into account, broadly the position is as follows:

1. Individuals must apply for probate of a will, unless an exempted entity (eg the Public Trustee, Perpetual, ANZ Trustees or NAB Trustees etc) is appointed;
2. There are no such prohibitions at law in relation to who may act as trustee of a testamentary trust;
3. We regularly assist in setting up estate plans with a private company acting as the trustee of a testamentary trust; and
4. There are a range of issues that best practice suggests should be taken into account however – we often for example see the failure to take into account the rules under the Corporations Act prohibiting share self ownership, addressed in two previous posts.

As usual, please contact me 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 REM song ‘Get up’.

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