Adding a Corporate Beneficiary into the Trust

Hi, if I need to add a corporate beneficiary into the family trust, should I do this before or after purchasing assets? Can this be done at anytime before income distributions?

 

You shouldn't be adding a corporate beneficiary - it should already be a beneficiary, otherwise you run the risk of a resettlement - which won't matter much if there is are no assets in the trust other than the settled sum.

Seek legal advice - from a lawyer.

 

The trust deed should have beneficiary classes. What does it say?

 

Legal Tip 136: How to Set Up a Bucket Company as Beneficiary of an Existing Discretionary Trust Legal Tip 136: How to Set Up a Bucket Company as Beneficiary of an Existing Discretionary Trust

 

Thanks Terry, I overlooked that the beneficiary classes in the trust deed did mention Companies of which any beneficiaries is a shareholder or director.
As far as you know, what do people usually do to protect these cash received from the trust by the company?

 

Not sure what you mean by that last sentence

 

Hi Terry, I was just wondering usually how the cash received by the bucket company (corporate beneficiary) are protected?
Although the bucket company may not be trading, but its shareholders may face problems i.e. lawsuit etc... so the cash are still exposed to creditors.

 

If you 'protect' the company shareholder debts, you open up risks of looting by trustees, for example. And it complicates succession.

 

you would need to carefully think of who the shareholders should be. The trustee of another discretionary trust perhaps

 

The family trust election issues also need to be considered. Tax law could limit some "apparent" corporate beneficiaries. As may the trust deed.