A trust is a legal structure by which the control of assets is vested in a separate party to the ultimate beneficiaries of those assets. A trust is created by a settlor who makes the first contribution to the trust and may also include an appointor who has the power to appoint or remove the trustee.
The trustee has a fiduciary duty to the beneficiaries and must act in their interests in preserving and protecting the assets of the trust. However, the beneficiaries do not have a direct interest in the assets of the trust. The trustee’s powers are governed by the terms of the trust deed and are affected by the common law principles applicable to trusts and fiduciary duties and requirements of the Trustees Act 1962 (WA).
Trusts do not have a separate legal identity and transactions involving a trust are entered into by the trust though its trustee. For this reason, the trustee has a right to indemnity from the assets of the trust with respect to any liability incurred by reason of the valid exercise of the trustee’s powers under the trust deed.
There are a number of types of trusts, including:
- discretionary and non-discretionary trusts;
- discretionary family trusts; and
- unit trusts.
Trusts structures can be used for a variety of purposes, including:
- subject to principles governing avoiding creditors etc., to safeguard assets from third party access by placing them in a trust which the relevant party does not control;
- provide assets and income for beneficiaries without providing ownership or control to those beneficiaries;
- seeking to avoid a conflict of interest by using a “blind trust”;
- to minimise taxation liability by using a trust structure to distribute income.
Transactions involving trusts generally contain special clauses seeking warranties from the trustee.
Rowe Bristol Lawyers has had wide ranging experience at advising clients with respect to trusts, including:
- considering and advising the client as to the suitability of a trust structure, including the type of trust that would best suit the purposes of the client;
- advising the client as to setting up a trust structure and the terms of a trust deed;
- liaising with specialist advisers with respect to the trust, such as tax accountants and tax lawyers;
- advising trustees with respect to their powers, liabilities and fiduciary duties;
- advising clients as to entering into transactions with a trustee; and
- advising and representing clients as to legal proceedings by or against a trust.
If you require legal advice in relation to trusts, please do not hesitate to contact us to arrange a meeting so that we may consider your specific circumstances.
The above information is provided as general information only and should not be relied upon as legal advice. The accuracy of this information may have changed from the date when it was published.