It’s the End of the Financial Year and We Know It*

As we approach the end of this financial year, there are a few checklist items you should tick off for your clients’ family trusts.

It is important to make sure income distribution resolutions are made before 30 June and that they are made in accordance with the trust deed. Sometimes, the deed will contain additional requirements for resolutions to be effective, like the approval of a guardian, or it might stipulate different timings.

You should also make sure the beneficiaries receiving distributions are eligible beneficiaries under the deed – read the fine print! For example, check corporate beneficiaries are permitted and that intended beneficiaries are not inadvertently excluded via convoluted wording in the trust deed.

Check to see if the family trust deed needs updating. If it is a pre-2010 deed it may require a Bamford update, or if the trust acquires residential property after 1 March 2020, the deed must be updated to exclude foreign beneficiaries to avoid additional stamp duty on the purchase.

Also, if your clients are wanting to complete any property transfers pre-30 June, especially if they wish to apply for a duty exemption, then this will need to be dealt with urgently.

Finally, make sure clients address the succession of the family trust as part of their estate plan. Importantly, check appropriate transfer of control mechanisms are in place for the appointor and trustee roles and review unpaid present entitlements which may form part of a client’s personal estate.

 

If this article has raised more questions than answers for you, contact the legal team at Partners Wealth Group on 1800 333 143.

*It’s the End of the World as We Know it (And I Feel Fine) is a 1987 song by American rock band R.E.M.