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Bust-proofing trusts


Longstanding views about the form and level of asset protection afforded by trusts have been challenged and made less certain by a number of recent court decisions and legislative changes. This article explores the key issues to consider when seeking to “bust-proof” a trust, that is, to render a trust structure less vulnerable to challenge on taxation grounds. The article examines the consequences of recent family court decisions involving trusts, some practical recommendations when dealing with trusts in the context of structuring a client’s affairs, the impact of the decision in the Richstar case in 2006, some bankruptcy issues, and critical issues to consider whenever establishing or amending a trust deed. In the author’s view, for the time being, the benefits of discretionary trusts are generally still sufficient to make them the preferred structure for asset protection purposes, but great care should be taken when restructuring and establishing discretionary trusts.

Author profile

Matthew Burgess CTA
Photo of author, Matthew BURGESS Matthew co-founded specialist firm View Legal in 2014, having been a lawyer and partner of one of Australia’s leading independent law firms for over 17 years. Matthew’s passion is helping clients successfully achieve their goals. Matthew specialises in tax, and estate and succession planning, providing strategic advice to business owners and high net worth individuals. He has been recognised in the Best Lawyers list since 2014 in relation to trusts and estates and either personally or as part of View Legal in Doyles since 2015 in relation to taxation, and since 2017 in relation to wills, estates and succession planning. In part leveraging off the skills he has developed working in the SME market space, Matthew has been the catalyst for a number of innovative legal solutions for advisers and their clients, including establishing Australia’s first virtual law firm. - Current at 13 August 2018
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