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Strategy 8: dealing with the family trust

Setting the scene:

  • Jay has a family trust which holds assets valued at $5m.
  • Jay is the sole trustee and appointor of the trust.
  • On his death he would like the trust to principally benefit Gloria and Manny along also with Claire and Mitchell.

Issues for Jay to consider:

Issue Options Instruction
Who to succeed Jay as trustee and appointor

Could appoint Gloria, Claire and Mitchell

If Gloria died, would be relying on Claire and Mitchell to “do the right thing” by Manny. Would they?

Consider independent trustee

Perhaps a good case for a letter of wishes to guide the trustees

Check trust deed and amend if necessary

Take some other action to compel distributions?

Is it viable to direct that trust is to be wound up on Jay’s death and assets distributed to certain persons (or to his estate?)

Sale or transfer of assets will be a disposal for CGT purposes – will this be an issue?

 

Can the deed be amended (or a resolution made) to stream distributions post his death?

Will this give rise to a resettlement?

Will it put each beneficiary’s entitlement at risk of family law claim?

 

Can the trust be split?

Will this give rise to a resettlement?

Will it put each beneficiary’s entitlement at risk of family law claim?