Why Trust Structures should be reviewed by your Lawyer prior to set up

Before trading in Queensland or anywhere in Australia, it’s advisable to seek professional legal and financial advice to determine the most suitable company structure for your specific business needs and objectives.  The right structure can have a significant impact on your business’s success, legal compliance, and financial stability.

Setting up a trust in Queensland is a complex legal and financial undertaking, and it’s highly advisable to have a lawyer review and assist in the process for several important reasons:

1. Legal Compliance: Trust structures are subject to specific legal regulations and requirements in Queensland. A lawyer will ensure that your trust is established in compliance with all relevant laws and regulations to prevent potential legal issues down the road.

2. Tailored Advice: A lawyer can provide personalised advice based on your specific goals and circumstances.  They can help you choose the most suitable type of trust (Discretionary Trust, Family Trust or Unit Trust) and ensure that it aligns with your objectives.

3. Asset Protection: Trusts can be used for asset protection, but it’s essential to structure them correctly to achieve this goal. A lawyer can help you establish a trust that offers the level of asset protection you require.

4. Tax Implications: The tax implications of a trust can be significant. A lawyer with expertise in tax law can help you structure the trust in a way that minimises tax liabilities and maximisers your financial benefits.

5. Fiduciary Duties: Trustees have fiduciary responsibilities to manage the trust in the best interests of beneficiaries. A lawyer can provide guidance on fulfilling these duties, which can be complex and legally binding.

6. Document Preparation: Trust deeds and related legal documents must be drafted accurately to reflect your intentions for how the Trustee will operate the Trust and who should benefit from the Trust. Lawyers have experience in drafting these documents to ensure they are legally sound and comprehensive.

7. Beneficiary Designations: Determining the beneficiaries of the trust and how distributions will be made can be intricate. A lawyer can help you structure these arrangements in a way that meets your objectives while remaining with legal boundaries.

8. Foreign Beneficiaries: In many states, if your Trust Deed is not correctly prepared it can be deemed to be a foreign entity and your Trust will be subject to additional land tax and stamp duty costs should you purchase property with your Trust. It is essential that the correct clauses are included to avoid these additional costs from the start.

9. Ongoing compliance: Trusts require ongoing administration and compliance with changing laws and regulations.  A lawyer can assist with ongoing trust management and ensure that it continues to meet your needs and legal obligations.

10. Dispute Resolution: In case of disputes or conflicts with the trust, a lawyer can offer dispute resolution services to help protect your interests and mediate disagreements among beneficiaries or other stakeholders.

11. Peace of Mind: Engaging a lawyer ensures that your trust is established correctly and operates in a legally sound manner. This provides peace of mind and minimises the risk of costly legal issues in the future.

If you do not set up your Trust correctly at the outset it can be very difficult to vary the Trust structure at a later date. There is also the risk that you trigger a resettlement of the Trust Deed which means you may be required to pay stamp duty to vary your Trust structure.

In Queensland, as in many other jurisdictions, the legal and financial implications of establishing and managing a trust are significant.  Given the complexity of trust structures and the potential consequences of errors or oversights, seeking legal advice and assistance is a prudent and responsible step when setting up a trust.

McLaughlins Lawyers have been helping people set up complex Trust structures for over 65 years. We understand the need to balance the legal and financial benefits of a Trust and can assist you to structure your Trust properly from the outset and avoid unnecessary costs to correct simple mistakes. Call or email Pip Davis on (07) 5591 5099 and [email protected] for help.

McLaughlins Lawyers, your experienced Gold Coast lawyers, we stand beside you and are here to help you with all your business structuring needs.


Author: Pip Davis

Director: Paul Davis

Date: 22 February 2024