Vesting a Family Trust deed
Vesting a Family Trust for Centrelink?
You have finally retired and applied to Centrelink for a pension. Unfortunately, Centrelink takes issue with the fact that you have an old family trust that was created 30 years ago. It hasn’t been used for years. There is no money left in it. The trust has a nil value. It has no assets and no debts. What can you do? You need to formally wind up (vest) the trust to close down this unused structure. Build this Vesting a Family Trust deed on our law firm's website.
Vesting a Family Trust you don't want?
You have an old Family Trust. Your accountant or financial planner suggests that it is more trouble than it is worth. Vesting a Family Trust is simple and straight forward. Just build this Vesting a Family Trust deed.
Why should I wind up the Family Trust?
• The Trust has achieved its original purpose
• It has no assets (if it has debts do a Debt Forgiveness Deed first)
• The controllers of the trust don’t want to continue
• The trust has reached its vesting date
How do I end the Family Trust?
1. Distribute any capital that is left
2. Build a Debt Forgiveness Deed to forgive loans and Unpaid Present Entitlements owed to beneficiaries
3. Prepare any outstanding tax returns
4. Build and sign the Vesting a Family Trust Deed and the minutes
Build this Vesting a Family Trust deed on our website. You get:
1. Vesting a Family Trust deed (just print and sign)
2. Minutes for your Accountant's due diligence file
3. law firm Letter of Advice
Have a look at the Sample document and there are many training videos and hints to help you as you build the document.
See also:
Update the Family Trust for Bamford streaming only:
Or, update Bamford streaming PLUS update the rest of the Deed:
Or update for Bamford streaming PLUS the Deed PLUS update the Appointor & Trustee:
Or just update the Trustee:
Or just update the Appointor:
To set up a new Family Trust Deed:
To prepare the Annual Trust Distribution Minutes:
To deal with Division 7A (loan or UPE from your company to the Family Trust):
Or, to forgive the 'loan account' and UPEs (loans from humans to Family Trust):
Change the name of your Family Trust:
To wind up and vest the Family Trust, when you no longer want it:
Telephone us for legal advice on building this document.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, Dip Ed, BArts(Hons), LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
National Australian law firm
Toll free: 1800 141 612
Mobile: 0477 796 959
Email: brett@legalconsolidated.com
Skype: brettkennethdavies
You have finally retired and applied to Centrelink for your Age Pension.
Unfortunately, Centrelink takes issue with the fact that you have an old family trust that was created 30 years ago. It hasn't been used for years. There is no money left in it. The trust has a nil value. It has no assets and no debts. What can you do? You need to formally wind up (vest) the trust to close down this unused structure, you can do so with this Vesting Deed
Why should I wind up the trust?
- The Trust has achieved its original purpose
- It has no assets
- The trust has reached its vesting date
What do I need to do to terminate the trust?
1. Distribute to beneficiaries the trust capital.
2. Payout all trust liabilities. Or get them to forgive all debt with a Deed of Debt Forgiveness. This includes any existing or future
tax liabilities that arise as a result of the termination of the trust.
3. The Trustee must pass a resolution determining that the trust is to be vested (terminated).
4. The final accounts of the trust, including a final tax return, must be prepared.
Once this is done, you can build our Deed of Vesting of a Trust and build a set of documents which allows you to vest and close the family trust.
After building this document on our website you are emailed:
1. Family Trust - Deed of Variation of Vesting
2. Minutes
3. law firm Letter of advice
What do I need to do to terminate the trust?
1. The capital of the trust must be distributed in accordance with the trust deed.
2. The Trustee must satisfy any existing liabilities of the trust. This includes any existing or future
taxation liabilities that arise as a result of ending the trust.
3. The Trustee must pass a resolution determining that the trust is to be vested (terminated).
4. The final accounts of the trust, including a final tax return, must be prepared.
5. Build this document
To update your Family Trust, we need to first identify it. We do this by referring to:
1. The Family Trust name (e.g. Jones Family Trust)
2. Date the Family Trust Deed, that established the Family Trust, was signed
3. The Settlor's name.
Every trust has a name. Sadly, they are generally quite boring. E.g. Smith Family Trust, named after Mr Smith.
The trust name is a 'nickname'. It is not registered anywhere. It just helps you and your accountant identify your Family Trust.
Take out your Deed of Trust that first started your Family Trust. Have a look at the front cover. It often has the name of your Family Trust. It repeats in the body of the Deed as well. Check any subsequent Deeds of Variation, to make sure that your Family Trust didn't change its name.
Be careful to not confuse the Family Trust name with your Trustee. Your Trustee (e.g. XYZ Pty Ltd) is not your trust name.
There is generally no difference between a:
- Family Discretionary Trust
- Family Trust
- Discretionary Trust
We, tax lawyers, tend to call them 'Discretionary Trusts' because we like the fact that every year the Trustee has the discretion to distribute income to different beneficiaries.
While, our friends the accountants, usually call them 'Family Trusts'. This is because only mum and dad and the immediate family operate a family business or hold assets in a 'Family Trust'. If people out of the immediate family are involved in the business then a 'Family Trust' is not appropriate.
Because you are building your Deed of Variation at our law firm's website you:
1. retain legal professional privilege
2. are protected by our law firm PI insurance
3. receive legal advice
4. by law have us act in your best interests, over our own
Only a law firm provides the above.
'Resettlement' happens when you alter the Trust to such a level that it becomes a new trust. You would then suffer Capital Gains Tax, Stamp Duty and other issues.
As a taxation law firm we ensure that you do not suffer a 'resettlement' by applying:
1. Clark's case
2. High Court decision in FC of T v Commercial Nominees [2001] HCA 33
3. ATO's withdrawal in 2012 of its Statement of Principles on the Creation of a New Trust and its release of the ATO's Decision Impact Statement