August 2011
Modern Discretionary Family Trusts usually provide that the trustees can pay both income and capital to the beneficiaries at their discretion. Trustees then have a discretion as to what each beneficiary will receive and, depending on the terms of the Trust Deed, may have a discretion as to whether to distribute at all. Trustees of Discretionary Trusts do not have to provide reasons for their decisions.
It is important to make distributions in accordance with the terms of the Trust Deed and to document what has been done. This includes recording the necessary trustees’ resolutions and recording the transactions in the Trust accounts. Regular withdrawals from the Trust must also be accounted for correctly. There should be a clear understanding by all trustees as to what is actually being done.
Poor administration and incorrect trustee behaviour can incur his/her tax rates and create unwanted outcomes from a tax point of view. It can also mean the validity of the trust is put at risk.
For further information, please contact Tony Fortune or Katherine McCarthy
Researchers say our brains do their best to keep us from dwelling on our inevitable demise. It is probably no…
Have you ever been stopped by the police while driving and wondered what information you have to provide them? This…
Transferring your assets to a trust even before you are in a de facto relationship, does not prevent those assets…
With Christmas approaching, employers are again having to navigate the complexities of the Holidays Act. New legislation, providing clear methods…
In this 2022 Supreme Court’s decision, the Court confirms the relevance of the conduct of the party cancelling an agreement.…
This website uses cookies.