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TRUSTS

What is a Trust?

A trust is a legally binding arrangement for the ownership and management of money or property, by one person on behalf of another.

Trusts are commonly used to preserve assets, for tax planning and to provide for children, disabled persons and charitable causes.

The choice of an appropriately skilled and reliable trustee is essential.

Types of trusts

Infant Trusts

Infant trusts may be created in Wills, usually effective if both parents die, and are then managed for children until they attain 18 years or more.  The fund is used for the child’s benefit eg living expenses and education and may be provided in a tax effective manner.

Trusts for incapable beneficiaries

These are trusts managed for a person who cannot manage their own financial affairs during their life. The Public Trustee is respectful of the person’s needs, whilst maintaining a long-term goal for investment security.  The choice of investment mix/profile will be matched to the person’s needs.

Life Estates

A life estate is an estate in land that ends at death and, as such can not be inherited by another.  These trusts provide for accommodation and an income stream for the lifetime of a close relative or friend.  They are often used by people who have remarried and want to provide ultimate ownership of assets to their children rather than their second spouse.

Discretionary Trusts

A discretionary trust enables the trustee to use his/her discretion to split income within a family group for a period.  These trusts are tax effective as the trustee can vary the income paid depending on how much other income the beneficiary receives.  Often your assets will be greater after death (superannuation, life insurance) giving you greater scope for this type of estate planning. There are tax advantages in establishing a trust through a Will.

Charitable Trusts

These trusts are established to serve private or public charitable purposes.  Though a charitable trust you can provide long term benefit to charity by providing income from your estate, rather than giving an immediate gift.

As these trusts can be long term or even perpetual, the Public Trustee is an ideal choice as your trustee.  The Capital Region Community Foundation provides an excellent vehicle for persons wishing to benefit charities in their local region. The Public Trustee is trustee for the Foundation.

Establishing a trust

A trustee should be carefully selected.  Trustees require at the very least, an understanding of law and accounting.  An inexperienced or unqualified trustee may make imprudent investments, spend allowances irrationally or deplete trust funds inappropriately.

The Public Trustee offers a professional trust administration service.  We have significant experience in managing both personal and corporate trusts. We are impartial and are audited by the ACT Auditor General.  Most importantly, we are a perpetual entity, which is essential considering the length of time a trust may have to be managed.

Our experienced team will closely follow the terms of the trust.  As trustee, we have a duty to ensure that the trust remains in a sound financial position and the needs of the person benefiting from it are met.

Our Trust Officers can be contacted directly to discuss any issues relating to the trust. They have access to a range of specialist support services in areas such as investments and financial planning, property, legal and taxation.