Patty & Selma are personal trustees of the Patty Selma Trust, holding a NSW property. One year later Selma passes away from lung cancer due to a smoker. What would happen next in this situation, would the Patty Selma Trust do a resolution then notify the NSW Land Registry Services to take Selma off the title and only have Patty listed on the title? Are there any tax or legal consequences when this happens? The Trust is still holding the property even though one trustee has passed away. Patty's will says 100% of here asset goes to Selma if she passed away and vice versa for Selma.
What does the trust deed say? Generally the property would need to be transferred to the new trustee's name and there are stamp duty consequences to consider. The trustee should seek legal advice, especially if in nSw
Generally, Land Title will only be transferred on proof of the trustee arangements. The deed may suffice as would evidence that the trustee is acting as trustee (trust accounts) unless the land is already registered for land tax for a trust. There is a land title fee but no transfer duty. A deed or other evidence of the change of trustee will be required. A deed is often preferred over resolutions as lenders and other aprties may place more reliance on this in the future as the old deed will be inconsistent with the new trustee. Something for your solicitor to advise on. There can be some issues with some forms of trust. For example if the Patty and Selma trust was a unit trust and the will meant Patty inherits Selma's units then there may be a legal issue. The trust may end uderthe common law process of merger and Patty may now be the sole legal owner. No trust. And no duty usually. Merger is the legal process by which a legal and beneficial interest become one. You cant hold something on trust for yourself. There is otherwise no tax consequence of a change of trustee.
If Patty is a continuing trustee on Selma's death, there could be full duty if she was also a beneficiary. Does that mean if the trustee is changed to Homer & Marge or a company at Selma's death, no duty is payable and there's no tax consequences? What about if a continuing trustee is not a beneficiary as the beneficiary is another trust? Eg, the beneficiary of the Patty Selma Trust is the Patty ATF Evergreen Terace Trust.
