Trust
Trusts are a favoured structure in Australia for carrying on a business or an investment activity primarily due to their flexibility, as well as the asset protection and taxation advantages they offer (although a trust may arise in many different situations, such as on death, or even being deemed to come into existence by a Court).​
A trust is not a separate legal entity but is, instead, a relationship where a person (the trustee) is under an obligation to hold property for the benefit of other persons (the beneficiaries).
Therefore, as a general rule:
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​The trustee is the legal owner of the trust property (e.g., the trustee is the registered owner on a land title); and
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The beneficiaries hold the beneficial interest in the trust property.​​
Other persons are also likely to have a role in the creation, or ongoing administration, of the trust.
Key Points
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Getting trust structures right – the first time!
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​Who should take on the key roles in a trust, such as Settlor, Trustee, Directors and Shareholders of a Corporate Trustee?​
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Who should be the appointor? The role of appointor should be carefully considered when the trust is first established.​
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Although the trustee controls the assets of the trust and the distribution of income, the real power and control of the trust generally lies with the appointor. This is because they have the power to remove and appoint the trustee, which accordingly provides them with ultimate ‘control’ of the Structuring with trusts. When drafting the trust deed, extreme care must be taken when choosing who should be the appointor of a discretionary trust.