Reminder to ensure that trust deeds are regularly reviewed
Written By Kathleen Jess.
It is important that trust deeds are regularly reviewed, to ensure that the provisions are appropriate for your or your client’s circumstances. In particular, it is important to ensure the following:
- that all of the persons or entities you wish to distribute income or capital to are beneficiaries of the trust;
- that any persons or entities you wish to exclude as beneficiaries have been validly excluded;
- that the income and capital streaming provisions are adequate;
- that foreign beneficiaries are excluded if real property is held in the trust or you think you might purchase real property (especially residential property) in the trust in the future;
- that the trustee of the trust has the power to do all of the things you want it to do (e.g. to borrow or lend money);
- that there is a valid mechanism for appointing a new Appointor or Guardian, for an Appointor or Guardian to resign, or for someone to take over the role of Appointor or Guardian if the Appointor or Guardian becomes incapacitated; and
- if you have any other concerns about the operation of the trust.
We recommend that trust deeds are reviewed every five years to ensure their currency in light of any changes to your circumstances and to the law.
