Discretionary Trust (Individual and Corporate)

About Product

One of the most important things for a small business client is to provide asset protection and minimise taxation with the distribution of income and capital to a bucket company and a range of beneficiaries as allowed under the deed.

► $129.00 (inc GST) - OR provided under your unlimited membership

► The master document has been signed off by LY Legal and is congruent with Australian law.

General Information

This is a discretionary trust that accords with the Bamford decision and focuses on the succession of appointors upon death, divorce, dementia or bankruptcy. It is subject to the Rule against Perpetuities and will last 80 years unless it is governed by South Australian law.

If you are establishing the DT with a corporate trustee structure, please have your ACN ready. If you need to establish a new company, please first purchase the LYD Standard Company.

Benefits

Benefits of the LYD Discretionary Trust ("DT"):

Asset Protection;
Provide for accumulation of assets for trust beneficiaries;
wide-ranging income and capital streaming for taxation purposes; and
provide discounts on capital gains tax.

What are the benefits of using a Corporate Trustee with the LYD DT?

Corporate Trustee can continue acting as trustee in perpetuity, compared to an individual who can be exposed to death, divorce, etc.;
Legal ownership over assets does not have to change when making changes to directors or shareholders, compared to individuals in which you have to change the legal ownership when they change;
Increased asset protection;
From a land registry, unit and share registry perspective, it provides administration simplicity as the company is the only name on the register and if directors come and go, there is no registry change; and
Liability which is limited to the assets of the company. Corporate trustees generally hold limited assets and are shell companies.

Frequently Asked Legal Questions

Why use the LYD Discretionary Trust?

The LYD Discretionary Trust accords with the decision in the Bamford decision and enables the Trustee to stream income, specific types of income and capital gains to a range of beneficiaries, including a company. It also provides for extensive asset protection.

Can my existing Discretionary Trust be upgraded to a LYD Discretionary Trust?

The issue is resettlement. As there is possibly a change in terms of the deed as well as beneficiaries it may result in a resettlement. However, if you would like legal advice to that effect, contact our legal team – info@abbottmourly.com.au

How long does this document take to assemble?

Depending on the complexity of the data, this document should take approximately 30-50 secs to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .

Do you have a data capture form I can use?

Yes. It is available here: https://info.lightyeardocs.com.au/supportcentre/data-capture-form-standard-discretionary-trust

Is this document a legal document?

All master documents have been signed off by LY Legal lawyers. Tony Anamourlis of LY Legal advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LYD platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LYD platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”

However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by LY Legal.

The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:

“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”

Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.

Is the document easy to read?

All LYD products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lyd.com.au.

What lawyers sign off on the LYD documents?

All LYD documents are prepared and signed off by LY Legal.

Are the LYD documents reviewed regularly?

All LYD documents form part of the LYD internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.

Can I get a sample of this document?

Yes, please email support@lyd.com.au to request a sample document for you to review.

Stamping and Lodgement of Trusts

The fees and stamping requirements for establishing a trust deed vary throughout Australia, and the duty payable also varies depending on the type of property that is held by the trust. Please contact our partners at Eventum Optimum (EO) on info@eventumoptimum.com.au for more information on when stamping is required (in what jurisdictions) and the fees/duties payable. EO are able to provide this service to you.