How to Read a Discretionary Trust Deed

For a discretionary trust, the Trust Deed is the primary source of a trustee's powers when dealing with trust property and, importantly, in making decisions regarding income and capital of the trust.

Serious consequences can flow from a failure of a trustee to be familiar with the terms of the trust deed. In this interactive and practical session, take a deep dive into common issues in interpreting discretionary trust deeds.

In this session, we cover:

• Tax agents and legal advice

• Why read the trust deed?

• Fundamental elements of a trust deed

• Top things to look out for, including:

  • What is ‘income of the trust estate’ and why does it matter?

  • Does the trust deed have effective default distribution powers?

  • Does the trust deed have the power to stream franked dividends and capital gains to particular beneficiaries?

  • What variation powers and constraints may exist? Is there resettlement risk?

  • Who is the appointor? What are their powers? What happens when an appointor dies or loses capacity?

  • Does the trust deed have a guardian – what are their powers?

  • What happens on vesting of a discretionary trust?

  • Do foreign purchaser additional duties apply – what is required?

Date recorded: 30 April 2024