What is a trust?
A trust is a well accepted legal arrangement where a person (known as the “trustee”) legally holds property for the benefit of another person (known the “beneficiary”). The trustee has the legal responsibility to manage the property for the benefit of the beneficiary. The person who sets up the trust is known as the “settlor”.

Trusts may be divided into two groups. They are – “inter vivos” trusts and “testamentary trusts”. Inter vivos trusts are created and start operating during one’s lifetime, whereas testamentary trusts are attached to a will and do not operate until after the death of the person making the will.

The two most common trusts that are used in Victoria are family discretionary trusts and unit trusts.

Why have a trust?
There are many reasons why people create trusts. The two most common reasons are:

• To protect assets

Once an asset is transferred to a trust (or purchased by a trust) it becomes the property of the trust. The asset is not owned by the settlor, trustee or beneficiaries. This means that if any of these people fall into financial difficulty or are involved in family court or other legal proceedings the assets of the trust are generally protected (subject to some exceptions).

• For tax reasons

For some people, there are tax advantages to transferring assets into a trust as opposed to keeping the assets themselves.

Our services
Lukaitis Partners is able to provide the following services:

• preparing a wide variety of trust deeds including testamentary trusts in wills,
• reviewing trust deeds and advising on the rights and obligations of parties pursuant to the Trust Deed,
• amending Trust Deeds (eg. to change the beneficiaries or to insert additional trustee powers),
• preparing documentation required for the retirement of a trustee and appointment of a new trustee and transferring property and other assets to the new trustee,
• splitting trusts (splitting an existing trust into two or more new trusts).

Trusts can be convenient and cost effective vehicles for protecting valuable assets, sharing income with family members and legally reducing any tax which may otherwise be payable. If you would like more information about trusts please contact us.