People usually set up a family trust to get some benefit from no longer personally owning an asset. A family trust may be useful to: Protect selected assets against claims and creditors – for example, to protect a family home from the potential failure of a business venture.
What is a family trust trustee?
The trustee acts as the legal owner of trust assets, and is responsible for handling any of the assets held in trust, tax filings for the trust, and distributing the assets according to the terms of the trust. Both roles involve duties that are legally required.
How is a trust established?
A trust is created by a settlor, who transfers title to some or all of his or her property to a trustee, who then holds title to that property in trust for the benefit of the beneficiaries. This may be done for tax reasons or to control the property and its benefits if the settlor is absent, incapacitated, or deceased.
How does a company as trustee of Family Trust work?
This is because it, itself, does not trade. The corporate trustee has no ‘beneficial’ interest in the assets it holds for the trust. The corporate trustee merely holds the assets for the ‘true’ owner – the Family Trust. Therefore, instead, the Family Trust gets the ABN and TFN. The corporate trustee does not do tax returns.
Who are the parties in a family trust?
At the core of a family trust, there are three parties: a grantor, a trustee and the beneficiaries. The grantor is the person who makes the trust and transfers their assets into it. The trustee is the person who manages the assets in the trust on behalf of the beneficiaries.
What do you need to know about setting up a family trust?
Setting up a trust, whether a family trust or any other type, is basically a two-step process: Create and execute a trust agreement document. This document will list the beneficiaries, name a trustee (or trustees), and set forth instructions for how the assets should be managed.
Can a family trust company file a TFN?
Your family trust corporate trustee company (while owning the assets as trustee) does not trade, therefore, your company does not require a TFN or ABN. The family trust corporate trustee company does not file tax returns as it does not trade in its own right. Who owns the shares of a family trust corporate trustee company?
