Family Trust Deed

Family Trust Deed

A Family Trust Deed serves as the rulebook for how your trust is maintained and operated.

This do-it-yourself legal document generator guides you through every step of drafting your own Deed – one that’s specifically tailored to your requirements and ready to use in minutes.
$ 499 incl GST
Family Trust Deed

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How does it work?

Our intuitive tool will guide you through step-by-step from start to finish. It’s quick, easy and simple to understand – just how legal documents ought to be.

The expert interview wizard will help you answer a few questions and prepare your document in the background. You’ll have your custom Family Trust Deed in 5 minutes or less.

When you’re done, print or download a PDF versions for you to review, customise or sign.

What is a Family Trust Deed?

A Family Trust Deed is a legal document that establishes a family trust and records the terms and conditions by which the trust operates.

It acts like the Family Trust’s rule book. As a deed, it is created by declaration so it is executed by the initial trustee.

When should I use a Family Trust Deed?

The Family Trust Deed should be used if you’re trying to establish a trust. The deed outlines the purpose of the trust and the rights and obligations of the trustees and unit holders.

What topics does a Family Trust Deed cover?

  • Establishment of the Trust
  • Units and Unitholders
  • Partly Paid Units
  • Redemption, transfer and transmission of Units
  • Register and Certificates
  • Meetings and resolutions of unitholders
  • Duration of the Trust
  • Trust accounts
  • Trust income
  • Distribution prior to the Vesting Day
  • Trustees
  • Trustees’ manner of acting
  • Liability of Trustees
  • Indemnity from the Trust Fund
  • Trustees’ powers
  • Notices
  • Boilerplate language

What are the main decisions I need to make in creating a Family Trust Deed?

  • Is the trustee executing this deed an individual or corporation? It is important for the board of directors of the corporate trustee to properly approve the execution.
  • What is the threshold percentage ownership for convening a meeting of the unitholders? What percentage ownership consults a quorum in those meetings?

What other names does a Family Trust Deed go by

 Family Trust Deed is also known as: 

  • Discretionary Trust
  • Family Trust Agreement
  • Family Trust Fund Agreement
  • Discretionary (family) trust deed

Frequently Asked Questions

The parties involved are the trustees and the settlor. 

Generally you would need this document when you are establishing a Family Trust.

Unitholders are similar to shareholders in that they receive income proportionate to the number of units they hold. However, unlike shareholders, unitholders also have a proprietary interest in the trust assets.

Family Trusts are more tax efficient as they are eligible for CGT discounts. They are also not regulated under the Corporations Act 2001 (Cth) so they have more freedom in transactions affecting the unit capital, variations of class rights,  financial reporting obligations and more. They may still be governed under the act as a ‘managed investment scheme’ and be required to register with the Australian Securities and Investments Commission (ASIC). Please contact us for legal advice if you have any doubts about whether your trust will be required to do so.

Family Trusts hold the assets of the trust instead of the beneficiaries. Trustees divide the assets of the trust into units, and investment returns are distributed to unitholders according to the number of units held. 

On the other hand, discretionary trustees, as their name suggests, have the flexibility to distribute trust income to beneficiaries at their discretion. Typically trustees will exercise this in dividing the income in the most tax effective manner.

Trustees are  personally liable for the trust’s liabilities, so companies are often incorporated for the specific purpose of acting as a trustee. This limits the liabilities and obligations incurred by the trust  to the company’s assets.

  • Stamp Duty – Depending on where the trust is created rather than the governing law, stamping may be required and stamp duty may be payable. 
  • Registration of managed investment schemes – Trusts that have more than 20 unitholders may become a ‘managed investment scheme’ for the purposes of the Corporations Act 2001 (Cth) and will be required to register with the ASIC. Please contact us if you need advice on whether your trust will be required to do so.
  • Unitholders Agreement – Statutory pre-emption rights in favour of existing unitholders in relation to issues or transfers of units do not apply unlike shareholders on issues of shares. Consider putting in place a Unitholders’ Agreement to this deed to create those same protections.
  • Deadlock resolution mechanics – You may find yourself in a stalemate where unitholders with equal voting power cannot reach an agreement. This Deed does not include any mechanics to resolve a deadlock. Please contact us if you would like to discuss how to avoid or resolve deadlocks.

The initial trustee needs to sign the document on behalf of the trust.

There are several signing options available. How you sign largely depends on where the parties are located and if they will attend signing together. You can print on paper and sign, or use electronic signature tools such as Docusign or Hellosign..

If you need any assistance please contact us directly, we would be happy to assist

If you have any questions or are uncertain about any aspect of the document please do not sign it or use it, Please contact us directly and we would be happy to assist.

Absolutely! Get in touch with us and we can provide a fixed-fee price to review it.

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What other documents might I need?

If you’re interested in a Family Trust Deed you might also need to think about:

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