Discretionary Trust Question - Help !!!

Discussion in 'Legal Issues' started by Helen Le, 17th Apr, 2019.

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  1. Helen Le

    Helen Le Active Member

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    Hi,

    I am asking a question for a friend, he will also check with his accountant tomorrow.

    He is divorced with one child and he wanted to open a trust, so he can invest his money in it and possible pass on to his child later. He spoke to his accountant and the accountant set up a discretionary trust with him being both appointer and trustee. He was wondering what happens if he dies, can the trust be part of the will ? Who will appoint the trustee and how can the trust pass on to his child ?

    Thank you
    Helen
     
    Helen Le, 17th Apr, 2019
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  2. Trainee

    Trainee Well-Known Member

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    Partly depends on how much money is involved, but a individual trustee has problems: pretty mich what you mentioned. Testamentary trust is another option. Get specific advice but i would question why individual trustee.
     
    Trainee, 17th Apr, 2019
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  3. Helen Le

    Helen Le Active Member

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    Thank, can the appointment of a new trustee be part of the will ? It's unlikely that my friend will die soon, but he just wants to make sure that things cover.
     
    Helen Le, 17th Apr, 2019
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    He should be seeing a lawyer about this as legal advice.

    It will depend on the way the deed is drafted. It is irrelevant who the trustee is as the appointor can probably remove the trustee.

    Ideally the current appointor could appoint their successor via separate deed. If the deed makes the legal personal representative of the current appointor as the next appointor it should be amended by a lawyer.
     
    Terry_w, 17th Apr, 2019
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  5. Kelly88

    Kelly88 Well-Known Member

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    Currently he is the appointer. Can he specified the new appointer and how he wants to distribute the trust through the will ? Tx
     
    Kelly88, 17th Apr, 2019
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I just answered this above. Need to read the deed.

    One thing is certain though, the trust cannot be distributed through the will.

    Seek specific legal advice - from a lawyer.
     
    Terry_w, 18th Apr, 2019
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  7. Trainee

    Trainee Well-Known Member

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    Also consider future partners, future children, death, etc If your friend has a partner in the future and more children, then dies, what happens?
     
    Trainee, 18th Apr, 2019
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  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Terry_w, 18th Apr, 2019
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  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The legal advice is important. I have been approached many time by people undergoing separation and divorce who think they can move assets to a trust and it safeguards this. They may actually complicate matters.
     
    Paul@PAS, 18th Apr, 2019
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