A trust may be ‘split’ into 2 different trusts each taking part of the assets of the original trust. The ability to split the trust will depend on the wording in the trust deed - various powers are needed such as the power to appoint a new trustee over specific trust assets and other wording. There could be various reasons why people would want a trust to be split but the main ones being to separate assets into different trusts so sub-family groups so as they can each go their own way. For example a parent may die leaving a discretionary testamentary trustee 2 properties with the trust controlled by both of the 2 children. One child may want to mortgage the properties and borrow further but the other doesn’t and may want to sell. In this case it may be better for them to split the trust and to take one property per trust. Once split beneficiary B can control one trust and its property and beneficiary C can control the other and they can sell or mortgage of do what they like (subject to the terms of the trust) without it affecting the other one. Specific advice will be needed on the legal, duty and tax aspects. It could be CGT exempt depending on a lot of things, but stamp duty will vary from state to state. Once split then further changes may be possible such as changing appointors or terms in the deeds.
