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Copy From Existing Trust

Discussion in 'Legal Issues' started by dd81, 28th Feb, 2016.

  1. dd81

    dd81 Member

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    Hi All,

    I have a Family Discretionary Trust set up before, and planning to set up another one with exactly same layout (just slightly different for beneficiary list and different company name for the corporate trustee). My lawyer friend said I could just copy the existing trust deed that I have and amend the beneficiary list and company detail, get it stamp and start using it (I am planning to purchase properties under it, just like the existing trust).

    Just wondering if it is as simple as what my lawyer friend suggested? If I just simply copy my existing trust deed and amend the specific parts that he mentioned, would it just works? does it mean when my previous accountant / lawyer set up the trust for me, they simply created the trust documents and didn't need to "register" it somewhere with the government or whatever department? so the only thing to make the trust deed valid is by getting it stamp?

    Just want to understand it more so I don't get surprise when I start using this new trust.

    Thanks!
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You could as long as not breaching copyright.

    The only thing that makes a deed valid is the paper it is written on and the signatures, even if not stamped. There is no registation of trusts.

    But don't you think you should get some advice first. How was the first trust set up and did you get legal advice when doing so? If not you may be repeating mistakes.

    And don't forget a deed is only part of the trust.
     
  3. dd81

    dd81 Member

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    Thanks Terry!

    My first trust is created by my accountant together with his solicitor. They help me to create both company and trust.

    This new one I created the company online guided by my lawyer friend, and he reviewed my existing and new trust for me. On my existing trust, my accountant (also my settlor) and I only signed on the last page, but my lawyer friend advice to sign on last page plus initial on every pages by my settlor. Is it required / better to do so?

    What do you mean deed is only part of the trust? it seems the hard copy of the trust deed is so important, at the moment i have 1 original trust deed in the safe deposit box and another original I keep in my file. Any other smart advice I could learn from you on how to keep these docs? =)

    Thanks!!
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    The deed is not the trust, but just a record of the terms the trustee has agreed to hold property on.

    A trust needs 3 things
    1. A trustee
    2. One or more beneficiaries
    3. property
    and some say a forth:
    4. An obligation in equity

    No need to initial every page either.
     
  5. RPI

    RPI Property Lawyer, Town Planner Business Member

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    How old is the previous deed? Downsides are high if it isn't done correctly. There may be less risk in doing an online one (at least these should be updated regurlarly to reflect recent cases) compared to getting it wrong. Does your lawyer friend have any idea about trusts? Law is a very broad field, if they don't know the area well then it could be an issue also. You don't know what you don't know.
     
  6. dd81

    dd81 Member

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    Thanks Terry and RPI!

    The previous deed is only 4 months old, so it is pretty recent. My lawyer friend does property settlements and he has his own trust too. But I don't think he has create a trust deed before. He did say my existing trust is better than one of his other client's. I did suggest to use cleardoc (online one), he said not really necessary, hence wanted to double check here with the property experts =)
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    So you have permission to copy it fr the lawyer that drafted the deed?
     
  8. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    I know a well know lawyer who stole the intellectual property in a trust deed and copied it. Worst part was he used it in a tax scheme that got identified by the ATO. (That's how it was identified) He had to pay damages. It happens a bit. Some tight ars#d accountant or lawyer thinks a photocopier is like printing $100bills. However one day someone asks a technical question ..... Don't expect mercy.

    I would stop using any adviser who advocates theft.
    Why not counterfeit the duty stamp too ?

    Terry raises a very good point...A deed doesn't define a trust. Get the trust formation wrong and there may not be a trust. Save $10 a month and avoid opening a bank account. Brilliant idea. Don't bother with stamping the deed, don't even sign it - Do it later.
     
  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    This teminds me of a victorian case where a property investor had set up 50 or more trusts for himself by copying deeds. About 48 of them were invalid.
     
  10. dd81

    dd81 Member

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    Thank for pointing that out. I emailed my accountant to let him know I am intending to reuse the doc and happy to pay a fee for that to make it fair and in case there is copy right for the document as some of you previously mentioned, although I can't see copy right on the doc. I shall see what he come back with.
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Just because there is not copyright notice doesnt mean it is free to copy. The author still holders copyright
     
  12. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Wouldn't it be easier and cheaper to just order a new trust deed of the same source ?
     
    Terry_w likes this.
  13. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    I once had a taxpayer approach me and he had a land tax issue (to start with). He ordered a online (cheap) deed for owning his property in a trust. He did it himself. He thought it was a fixed trust. It wasn't. And when OSR looked at it for land tax they enquired about stamp duty on the deed.

    What he did was settle the trust for the $950,000 cost of the property he transferred into the trust and he issued two units at a price of $475K each. And it was a commercial property. So they whacked him with stamp duty on the deed based on that value. Then they told him it was a hybrid unit trust not a fixed trust. So he copped two years of land tax that he wouldn't otherwise had to worry about.

    Then it got worse. He didn't realise he had a GST issue and a CGT issue. So he had a land tax, stamp duty, income tax, GST and CGT issue. All because he did it himself cheaply at 11pm at night.
     
  14. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    But he saved some money by doing it himself!
     
  15. CU@THETOP

    CU@THETOP Well-Known Member

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    Now that's entertainment!
     
  16. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    And then there was the guy who wanted to transfer his property for his trust so he vested the trust without any advice. When he realised there was a duty issue (he tried to transfer title) he then created a new trust over the property to restore the trust issue. OSR were asking for two lots of duty. I couldn't help.

    Or the transport company that sold out. The buyer wanted a contract to buy vehicles so they went along with it and didnt even ask their accountant or lawyer. 100% taxable and no small business concessions. Lost 1/11th to GST etc...

    All people who saved money.
     
  17. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    reminds me of another person who had set up a trust years ago which had large accumulated losses they then went and purchased a risky commercial property in 3 individual names. After settlement they wanted to argue it was in a trust.