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Client Discretionary Trust Upgrade - Email Swipe

Below is an email for your use with your clients about upgrading their existing discretionary trust and not having a problem with resettlement. 

The upgrade can be completed on the LightYear Docs platform or it can be completed by Abbott & Mourly if the deed is old or the variation/amendment/upgrade clause is complex.  In order to ensure no resettlement the Commissioner states that:

 "the ATO accepts that a change in the terms of the trust pursuant to exercise of an existing power (including an amendment to the deed of a trust), or court approved variation will not result in a termination of the trust and, therefore will not result in CGT event E1 happening."


How to use this email swipe.  It is simple.  Take the headline below paste it into the Subject line, copy the body of the content and then email to clients directly or using an email platform like Mail Chimp.  This is a great fee earning strategy for year end.


Headline: Five reasons to update your Family Discretionary Trust Deed 

When you set up your discretionary trust it was for a specific purpose - whether asset protection, tax minimisation or to build a family wealth structure.  However like a mobile phone, what features were once popular may have gone by the wayside.  It is important to have a modern up to date discretionary trust deed.  So here are our five reasons to update your discretionary trust deed:

  1. Get a line of Appointors:  Like a company the Australian Securities and Investment Commission have warned about having only one director for a company (see below for a solution on that) and the same with a discretionary trust.  The Appointor is the real boss behind the trust and without a line of succession, at least two and better still 3 generations long, problems may arise if the trust is left without an appointor.
  2. Improved Asset Protection:  It is important to ensure that there is a corporate trustee (or the trustees are exposed personally to any litigation) and that the directors of the corporate trustee have successor directors in place in the event that they become sick, disabled, die or are litigated against.  The director may resign from their role and a close family member or associate can take their place to ensure continuity of business.
  3. Quarantining for blood relatives only: The trust you have is not built for blood relatives' beneficiaries and protection while our modern discretionary trust deeds provide that security ensuring your children's de facto cannot access assets in the trust in the event of separation.
  4. Ease of Use and Administration: Each year the Trustee must prepare detailed trust distribution minutes detailing how income from the Trust is to be distributed amongst beneficiaries.  Failure to distribute all income properly means that there will be 45% tax to pay.  With a modern deed tied into corresponding trust distribution minutes the task is more effective, quicker and less prone to costly tax penalties.
  5. Big changes happening:  Each State has put in place a 2% land tax surcharge on property held in a discretionary trust that does not specifically exclude foreign person beneficiaries.  Our modern discretionary trust deed upgrade does and also ensures that the accounting standards changes which require expensive "financial accounts" do not apply.  Both of these recent measures in the last year can prove extra costly.

Given all of the above and our desire to ensure that our clients have the best family succession, asset protection and trust estate planning structure and strategies in place, we highly recommend that we, through our partnership with Abbott & Mourly Lawyers, prepare a deed upgrade for you.  We have your old deed and simply need to know your line of succession of appointors and we will do the rest. If you do not act to upgrade and litigation ensues based on the provisions or failures of an older deed, we note that we have done our best to advise you of the importance of having a modern and up to date deed.

If you would like to enquire about a quote, simply respond to this email, it is a quick and not an expensive task.