Question on Accountants and Trusts

Just look for an accountant that can provide some good advice to go with the trust deed. Most accounants will just purchase these generic documents off the net. It is the advice that distinguishes them.

Terryw
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There are quite a few different types of trust:-
1. Discretionary Trust
2. Unit Trust
3. Testamentary Trust
4. Bloodline Trust, and
5. Hybrid Trust.

The difference between a discretionary trust and a unit trust is that the trustee of a discretionary trust has the “discretion” to distribute profits to beneficiaries in any ratio he/she/it sees fit..hence the term discretionary trust. The trustee has to distribute in line with what the “Trust Deed” allows.

A unit trust also has a trustee, however the trustee can only distribute profit in line with the way the units are held. For example if a unit trust was set up with 10 units and Mrs A has 5 and Mr B has 5 then the trustee must distribute any profit from the unit trust 50-50 between the unit holder, being Mrs A and Mr B.

A testamentary trust is a trust that you prepare – as in have a deed drawn up – before you die, normally when you have your will drawn up and the trust comes into force upon your death. They are normally (to the best of my knowledge) used as a form of asset protection for the beneficiaries of an estate.

A bloodline trust can be used as a testamentary trust or stand alone. The idea behind a bloodline trust is that profits derived within the trust can only be distributed to blood relatives ie. son, daughter, grandson, granddaughter etc.

A hybrid trust is a mixture of a discretionary trust and a unit trust. There would be a number of units issued which represent a % of the trust and the balance would be discretionary. I gather these are becoming popular.

I don’t know about Accountants, who to recommend and who you can trust. Accountants, like Solicitors make their money by selling their time. I have seen trust deeds drawn up by accountants that have caused no end of grief. Some accountants will have a template trust deed which they will use for everyone. Others will buy on line (find a copy of a CPA magazine and you’ll find half a dozen suppliers of trusts and companies).

There is a firm of Solicitors in Brisbane – Cleary & Hoare – who specialise in trusts and asset protection (commercial law). They have all their deeds checked over by a QC and are utterly up to date with tax law etc. They have a “Legal Resources Club” which you could enquire about.

There is a Trust Law Act in Queensland which governs what you can and cannot do with and in a trust deed…I would imagine that each State would have similar legislation.

Does this shed any light on the topic for you.

I have clients who have the following structure

A company which acts as the corporate trustee for both a discretionary trust and a unit trust. The discretionary trust is the holder of the units in the unit trust. For every new property they purchase they set up a new unit trust. Obviously they “re-use” unit trusts when they sell off a property.

This set up give you pretty good asset protection.

While Kelly and Terry replying this very well Thanks! Can people also comments on Wealth Guardian Pack. I have asked this also before and couple of people said this pack is good to understand trust etc very well.

Amit

hi amitash
thoroughly recommend Wealth Guardian as a good starting point. it helped me immensely. then i went and talked to a good accountant and he helped to clarify things a bit more.
good luck
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