Does my QLD trust deed comply with the Trust Act 2025?
Buried somewhere in the trust deed is a provision stating which State or Territory law applies. Find that clause. If your trust deed says Queensland law applies, then the Trusts Act 2025 (Qld) (Trusts Act) matters.
The Trusts Act affects many Queensland Family Trusts, Unit Trusts, Testamentary Trusts, bare trusts and some SMSF-related trusts. All Legal Consolidated trust deeds comply with the Queensland Trusts Act.
The QLD Trust’s Act treats different trusts differently
These are the different types of Queensland trusts:
- Family Trust: a discretionary trust where the Appointor tells the Trustee who receives income and capital.
- Unit Trust: a fixed trust where unit holders have fixed rights apportioned to the number of units they own (like shares in a company).
- Bare Trust or secret trust merely holds the asset for the ultimate controller, the beneficiary.
- Self Managed Super Fund: while a trust, it is heavily regulated by Commonwealth legislation.
So, start in the right place:
- Read the deed.
- Find the governing law clause.
- Identify the trust type.
- Then apply the Trusts Act 2025 (Qld).
Do not start with the Trusts Act. Start with the deed.
Trusts Act 2025 (Qld): does the Act override your trust deed?
Sometimes the Trusts Act wins. Sometimes the deed wins.
You must read both.
Section 3 of the Trusts Act 2025 (Qld) provides that the Trusts Act applies to a trust:
- whether it was created before or after the Trusts Act started (which was in 2026); and
- irrespective of what you trust deed states the Trusts Act overrides the trust deed unless unless the Tursts Act says otherwise. In plain English: your deed does not automatically beat the Act.
That is important.
Some sections are default rules. The deed can change them.
Other sections are harder to avoid. The deed cannot simply pretend the Act does not exist.
Look for words such as:
“subject to a contrary intention in the trust instrument”
or:
“subject to an express contrary intention in the trust instrument”
Those words tell you the deed may change the statutory rule.
But do not guess. Read the section.
Example: Your Family Trust deed says the trustee has “absolute discretion”. That does not allow the trustee to ignore statutory duties to keep accounts and records.
Example: Your deed tries to appoint five individual trustees for an ordinary Queensland Family Trust. Section 14 generally limits the number of trustees to four. SMSFs and charitable trusts have special treatment. But for an ordinary Family Trust, the deed does not simply win because it says five.
Example: Your deed has a trustee replacement clause. It may still work. But check the Act. Some trustee replacement rules only fill a gap. Other rules may apply more strongly.
The rule is simple:
Read the deed. Then read the Act. Do not assume the deed wins.
Trusts Act 2025 (Qld) and Queensland’s 125-year trust period
Queensland gives trusts a longer life.
Most old trust deeds use 80 years. Queensland law now allows up to 125 years.
This change sits in the Property Law Act 2023 (Qld), not the Trusts Act 2025 (Qld). Sections 216 and 217 of the Property Law Act 2023 (Qld) deal with varying a trust so it can use the 125-year period. If the trustee has power to vary the vesting date, section 216 may assist. If the trustee does not have that power, section 217 may allow all adult beneficiaries of full capacity to sign a deed to vary the vesting date.
This matters.
A trust that ends too early can trigger tax, duty and control problems.
Example: Mum and Dad set up a Family Trust in 1998. The trust owns the business premises. The deed has an 80-year vesting date. Their children want the trust to continue for the grandchildren. Queensland law may allow the trust to move to 125 years. But the deed must be checked. If the deed has a good variation power, the trustee may be able to vary the vesting date. If not, the beneficiaries or the court may need to be involved.
Do not say, “Queensland allows 125 years” and stop there.
Ask the real question:
Can this trust deed use the 125-year period?
Trusts Act 2025 (Qld) trustee duties: the trustee must act like a trustee
The trustee holds the asset.
But the trustee does not hold it for itself.
The trustee holds the asset for the beneficiaries, or for the trust purpose. That is why the trustee must keep records, act honestly and make proper decisions.
The Trusts Act 2025 (Qld) sets duties of care, diligence and skill. A professional trustee is held to a higher standard. A trustee with special knowledge is judged against that knowledge. An ordinary trustee is judged against the standard of a prudent person of business. The Act also requires trustees to act honestly and in good faith.
Example: Dad controls the Family Trust. He distributes all income to one child. He ignores the other children. There are no minutes. There are no reasons. There is no evidence that he considered the other beneficiaries. Dad dies. The ignored children ask questions. The new trustee says, “Dad always did it this way.”
That is not an answer.
It is evidence of poor trust administration.
In Owies v JJE Nominees Pty Ltd [2022] VSCA 142, the trustee of a family discretionary trust failed to properly consider some beneficiaries when making income distributions. The Court of Appeal removed the trustee. The case is a warning that wide discretion is not permission to ignore beneficiaries.
The lesson is blunt:
Discretion does not mean “do whatever you like”.
If the trustee makes a decision, document the decision.
Trusts Act 2025 (Qld) beneficiary rights: trust accounts are not every document
Queensland trustees must keep accounts and records.
Section 64 of the Trusts Act 2025 (Qld) deals with accounts and records. Section 65 deals with a beneficiary’s right to inspect trust accounts and get copies.
A beneficiary can ask to see trust accounts.
That does not mean the beneficiary gets every email, memo, legal advice, accountant note or private trustee discussion.
Example: A beneficiary asks for the annual accounts and distribution records. That is a proper request. The trustee should deal with it.
Example: The same beneficiary demands every email between the trustee, lawyer and accountant every week. That may be unreasonable.
Trustees should not hide.
Beneficiaries should not harass.
The middle ground is simple:
Keep proper records. Provide proper accounts.
Trusts Act 2025 (Qld) and Family Trusts: check control first
A Family Trust is usually a discretionary trust.
The trustee chooses who gets income and capital.
But the trustee may not be the real power.
The appointor often controls the trust. The appointor may remove and replace the trustee. That power usually matters more than any other clause in the deed.
Example: Dad is the appointor. He loses capacity. His second spouse controls access to him. The children from his first marriage say she is trying to take control of the trustee company. The dispute is not about tax. It is about control.
For a Queensland Family Trust, check:
- who is the trustee?
- who is the appointor?
- who replaces the appointor when the appointor dies?
- who replaces the appointor if the appointor loses capacity?
- can the appointor remove the trustee?
- does the deed deal with incapacity?
- can the trust use the 125-year period?
- are distribution minutes prepared each year?
- does the trustee keep proper accounts?
- does the deed work with the Trusts Act 2025 (Qld)?
The appointor clause is not boilerplate.
It is the control clause.
Trusts Act 2025 (Qld) and Unit Trusts: check fixed rights and deadlocks
A Unit Trust is not a Family Trust.
A Unit Trust usually gives unit holders fixed rights. Those rights come from the deed.
Read the deed.
Do not assume every Unit Trust works the same way.
The High Court made that point in CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98. The case concerned Victorian land tax and land-holding unit trusts. The High Court warned that “a priori assumptions” about unit trusts can mislead. The rights depend on the trust deed and the statute.
Example: Two unrelated families each own 50% of the units in a property Unit Trust. One family wants to sell. The other refuses. The deed has no deadlock clause. The valuation clause is weak. The trustee is controlled by one side.
That is not clever structuring.
That is a commercial fight caused by a poor deed.
For a Queensland Unit Trust, check:
- unit classes;
- voting rights;
- transfer rules;
- pre-emptive rights;
- valuation rules;
- deadlock rules;
- trustee powers;
- reporting rights;
- exit rights; and
- the vesting date.
A Family Trust dispute is often about discretion.
A Unit Trust dispute is often about fixed rights.
Trusts Act 2025 (Qld) and Testamentary Trusts: the Will must build the trust properly
A Testamentary Trust is built into a Will.
It starts after the Will maker dies.
Queensland’s 125-year trust period can help Testamentary Trusts. It may allow assets to stay protected for children, grandchildren and later generations.
But the Will must build the trust properly.
Example: A Will maker leaves assets to a Testamentary Trust for a daughter. The daughter later separates from her spouse. A well-built Testamentary Trust may help protect control of the inheritance. A weak Will may push the inheritance straight into the family law dispute.
For a Queensland Testamentary Trust, check:
- who controls the trust after death?
- who replaces that person?
- does the trustee have strong investment powers?
- can the trust use the 125-year period?
- are vulnerable beneficiaries protected?
- can income be streamed?
- does the Will contain proper trust machinery?
- does the trust work with the Trusts Act 2025 (Qld)?
A cheap Will often builds a weak Testamentary Trust.
The Will maker is dead before anyone finds the defect.
That is too late.
Trusts Act 2025 (Qld) and bare trusts: prove beneficial ownership
A bare trust is not a Family Trust.
A bare trustee usually holds property for the real owner.
The trustee usually has little or no discretion.
Bare trusts include:
- acknowledgements of trust;
- declarations of trust;
- nominee arrangements;
- custodian trust arrangements; and
- many SMSF limited recourse borrowing structures.
The High Court decision in Byrnes v Kendle (2011) 243 CLR 253 shows why documents matter. Mr Kendle signed an acknowledgement of trust declaring that he held a half interest in property “upon trust” for Mrs Byrnes. The High Court identified the issue as whether he was a trustee and whether he breached duties about rent from the property.
That kills the lazy argument:
“I was only on title.”
No.
If you are a trustee, you have duties.
Example: A property is bought in Mum’s name because the bank prefers it. Dad says half is really his. There is no proper acknowledgement of trust. Ten years later they separate. Everyone remembers the arrangement differently.
That is why bare trust paperwork matters.
For a Queensland bare trust, check:
- who is the legal owner?
- who is the beneficial owner?
- what asset is held?
- why is it held that way?
- does the trustee have any active duty?
- when must the trustee transfer the asset?
- what are the tax consequences?
- what are the duty consequences?
- is the arrangement properly documented?
With bare trusts, the evidence is the strategy.
Trusts Act 2025 (Qld) and SMSF custodian trusts: do not confuse the SMSF with the bare trust
An SMSF custodian trust is often a bare trust.
It is commonly used for a limited recourse borrowing arrangement.
The SMSF is one trust. The custodian trust is another trust.
They need separate deeds.
They do separate jobs.
Example: An SMSF borrows to buy business real property. The custodian trustee holds legal title. The SMSF trustee is the beneficial owner. The contract, loan, custodian deed and SMSF deed must all match. One wrong trustee name can create bank, duty and superannuation problems.
For an SMSF custodian trust, check:
- the SMSF deed;
- the custodian deed;
- the loan documents;
- the contract;
- the legal owner;
- the beneficial owner;
- duty treatment;
- bank requirements; and
- SIS Act compliance.
The custodian trust is not decoration.
It is part of the compliance machinery.
Trusts Act 2025 (Qld) and SMSFs: the four-trustee limit does not apply to SMSFs
An SMSF is a trust.
But the Superannuation Industry (Supervision) Act 1993 (Cth) does most of the work.
Section 17A of the Superannuation Industry (Supervision) Act 1993 (Cth) allows an SMSF to have up to six members. Generally, each member must be an individual trustee or a director of the corporate trustee, subject to exceptions.
Queensland generally limits the number of trustees to four. But section 14 of the Trusts Act 2025 (Qld) excludes SMSFs and charitable trusts from that limit. A custodian trustee is also not counted for that trustee-number limit.
That helps.
But it does not update your SMSF deed.
Example: A 2015 SMSF deed says the fund can have no more than four members. The family wants to add two adult children. Commonwealth law may allow six members. Queensland trust law may not block it. But the deed still says four.
The deed is the problem.
For an SMSF, check:
- does the deed allow six members?
- are all member-trustee rules satisfied?
- is there a sole purpose corporate trustee?
- do binding death benefit nominations work?
- do reversionary pensions work?
- are enduring powers of attorney in place?
- does the deed support the strategy?
A corporate trustee is usually cleaner than individual trustees.
Individual trustees create more paperwork when members die, lose capacity, separate or are replaced.
Trusts Act 2025 (Qld) and superannuation trustee decisions: make proper inquiries
Superannuation trustees must make proper inquiries.
In Finch v Telstra Super Pty Ltd (2010) 242 CLR 254, the High Court considered a trustee’s decision about a total and permanent invalidity benefit. The High Court catchwords record the issue as whether the trustee gave “genuine consideration” and whether it failed to make inquiries.
That matters for SMSFs.
Example: A member dies. The surviving spouse is also trustee. There is a binding death benefit nomination. There is a reversionary pension. There is an old deed. There is an estranged child.
The trustee cannot just “do what feels right”.
The trustee must read:
- the SMSF deed;
- the death benefit nomination;
- the pension documents;
- the Superannuation Industry (Supervision) Act 1993 (Cth);
- the regulations; and
- the trust records.
Then the trustee must document the decision.
Trusts Act 2025 (Qld) trust deed update: what Queensland trustees should check
For every Queensland-governed trust, check:
- the governing law clause;
- trustee powers;
- appointor powers;
- appointor succession;
- vesting date;
- whether the trust can use 125 years;
- beneficiary access to accounts;
- income and capital streaming;
- trustee replacement clauses;
- dispute clauses;
- record keeping;
- trustee number limits; and
- whether the deed can override the relevant section of the Trusts Act 2025 (Qld).
For a Family Trust, focus on control.
For a Unit Trust, focus on fixed rights and deadlocks.
For a Testamentary Trust, focus on death, control and asset protection.
For a bare trust, focus on beneficial ownership.
For an SMSF, focus on the Superannuation Industry (Supervision) Act 1993 (Cth) and the SMSF deed.
Trusts Act 2025 (Qld): the bottom line
The Trusts Act 2025 (Qld) matters for Queensland trusts.
But do not start with the Act.
Start with the deed.
Find the governing law clause.
Identify the trust type.
Check whether the Act overrides the deed.
Check whether the deed can use Queensland’s 125-year trust period.
Then update the deed before the fight starts.
A good deed prevents disputes.
A stale deed invites them.