Trusts are often used in business and are just as often misunderstood.
A trust is not a legal “thing”. It does not exist in the way that a company exists. In essence a trust is a set of obligations owed by one person (the trustee) to other persons (the beneficiaries).
A trust can hold assets, operate a business, administer assets or an estate or manage an investment for the benefit of another.
There are many types of trusts such as fixed, unit, discretionary, bare, hybrid, testamentary, charitable and superannuation trusts. Each arises in a different way.
They can sometimes arise as a matter of law but most often the relationship between the trustee and the beneficiary is guided by clearly defined obligations and objectives that are set out in writing. This is the Trust Deed.
The Trust Deed often brings with it a number of subsidiary documents. For example, agreements between the beneficiaries as to how their interests are defined and what input or influence they can have over the trustee, enterprise or asset that is held for them by the trustee.
The key is to ascertain if a trust structure is right for you and all key stakeholders and then work closely with your financial advisors and key stakeholders to shape it into a structure that delivers your desired outcomes.
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With over 30 years of experience in Commercial Law, our team are trusted advisors to some of Melbourne's most successful business people and families. Understanding the complexities of business, family life, wealth and risk is our priority for all of our clients, and we pride ourselves on providing advice that is practical, commercial and strategic.
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