You can use a family trust in Australia as an ownership structure for your family business and your family’s assets. You will be the beneficial owner of the assets and not the legal owner. You can also use a family trust to reduce your taxes and simplify the distribution process of your estate.
What is a Family Trust?
It is a discretionary trust set up to conduct a family business and/or to hold a family’s assets on behalf of the trust beneficiaries.
It is created to allow the trustee(s) to decide how the net income and capital of the family trust are distributed to the trust beneficiaries.
Parties of an Australian Family trust
Here are the parties involved in the creation and management of a family trust:
The trustee – This is the corporate entity or person responsible for administering the family trust according to the agreement governing the trust of the family trust.
The settlor – This is the person who signs the trust deed and authorises the trustee to manage the family trust.
The beneficiaries – They are the people who benefit from the wealth and assets held in the family trust.
The appointor – This is the person responsible for removing and nominating trustees if one of the original trustees can no longer adhere to the trust to administer the trust or one of the original trustees passes away.
How to Set Up a Family Trust?
Step 1 – Decide whether a discretionary trust structure is suitable for your circumstances.
Step 2 – Choose your trustee or trustees
Step 3 – Identify the beneficiaries of the trust
Step 4 – Hire a legal expert to help you create your trust deed
Step 5 – Select the fund settlor for your trust and complete the settlement
Step 6 – The trustee holds a meeting to allow the trustee to acknowledge their appointment
Step 7 – File your trust deed and pay stamp duty
Step 8 – Apply for a trust tax file number (TFN) and ABN
Step 9 – Open a bank account for your trust
Why Contact a Professional to Set Up Your Family Trust?
There are dangers of DIY the family trust. DIY the family trust can create a family trust incorrectly and transfer things into the family trust mistakenly. It can also lead to not structuring the family trust to achieve the trust’s goals.
It is better to consult an expert tax accountant in Perth to help you set up your family trust. Contact Griffiths Advisory today if you are a business owner looking for a tax accountant to help you set up your family trust in Perth, Western Australia.
Related Post: Benefits and Risks of Setting up a Family Trust in Australia
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Phil has been the Managing Director of Griffiths Advisory for 29 years, combining his expertise in taxation, business advisory, superannuation, negative gearing, and wealth creation. He also loves an active lifestyle, indulging in surfing, cycling, snowboarding, and spending quality time with his wife and two children.
