Trust Lawyers will protect your assets

A trust exists where a trustee holds property or legal rights on behalf of one or more beneficiaries. Brander Smith McKnight advises on the establishment, drafting and administration of discretionary trusts, family trusts, unit trusts and testamentary trusts, and on disputes between trustees and beneficiaries.

The person holding the company or rights is called the trustee while the person for whom property or rights are held in trust is called a beneficiary. The trust lawyers at Brander Smith McKnight have extensive experience in trust law.

Recent Successful Trust Results achieved by BSM Lawyers

Comprehensive Legal Advice for Family Trust Administration with Land Tax Implications (2025)

Brander Smith McKnight regularly assists clients with complex trust and tax-related legal issues, particularly where longstanding trust structures give rise to unexpected taxation consequences.

This matter involved analysing a trust deed and advising on the legal consequences of the trust reaching its vesting date. Our experienced Trust lawyers had identified that the nature of the trust had changed from a discretionary trust to a fixed trust once the vesting date had passed. We advised the trustee and beneficiaries of their legal obligations and rights following vesting, including the operation of trustee discretions, the entitlement of beneficiaries to trust capital and income, and the proper management of trust property. Our expert legal team also provided guidance on issues such as trustee duties, potential breaches of trust, the tracing of trust funds, and conflicts that can arise between trustees and beneficiaries when trusts are not properly administered.

Complicated Beneficiary Trust matter involving a Former Spouse (2025)

This complex matter involved our client’s former spouse who remained a beneficiary for trust property that was relied upon by our client’s family.

The asset pool was largely derived from the beneficence of the husband’s family member, and there was a dispute as to how this should be weighed in property division. There were also issues with financial disclosure and compliance with court orders, ultimately involving complex financial arrangements including trusts, real estate, company structures and contributions/entitlements.

The highly experienced Trust lawyers at Brander Smith McKnight advocated for our client in mediation and at the Federal Circuit and Family Court of Australia, where multiple directions hearings were handed down. Ultimately we achieved a successful settlement for our client. Both parties agreed to consent orders and the financial relationship was determined for all time, subject only to enforcement if necessary.

Complex Family Trust Dispute Successfully Resolved (2025)

The highly experienced Trust lawyers at Brander Smith McKnight advised on a complex family trust dispute, involving the potential sale of the trust property. Our client was a beneficiary of a family-owned discretionary trust. Our client challenged the trustee’s intention to sell trust property, without consultation with the beneficiaries which was a requirement of the trust deed. Our client asserted that he had beneficial interest in the property in the amount of a 50% share of the property in question and claimed to have put personal equity in the property.

Our lawyers provided strategic legal advice to the client and ultimately secured a caveat on their behalf which protected the equitable interest in the trust property, pursuant to an estoppel, constructive and/or oral express trust in the property which was between the caveator as beneficiary and the registered proprietor as trustee for half of the property. This resolved the client’s issue without further intervention, protecting their interests as well as the settlor’s interests.

Features of Trusts

A trust cannot exist where the trustee and beneficiary are identical. In simple terms you cannot hold property on trust for yourself, however you can hold trust for yourself and another.
A trustee holds duties to a beneficiary described as fiduciary duties. Put simply, the concept of fiduciary duties mean that the trustee must act in the best interests of the beneficiary. Some examples of fiduciary duties are protecting and preserving trust property, complying with the terms of any trust deed, keeping accurate trust records and providing financial reports to beneficiaries.
The law does not recognise a trust as a separate entity and any trust property is owned by the trustee. Trusts and trust properties have existed for many hundreds of years. Indeed, the extent of the property that a trust may hold was defined as early 1783 in the case of Head v Lord Tenyham (ER).
Similarly, the trust cannot have any debts. Any trust debts are debts of the trustee. Generally a trustee will be indemnified for any such debts by a clause in the trust deed.

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Types of Trusts

In broad terms there are two types of trusts, express and non-express trusts. Express trusts are always formed by a written document which is generally a deed. Conversely, non-express trusts do not have a written document or deed and are formed by operation of the law. There are two types of non-express trusts which are resulting and constructive.

Trust Deed

Express trusts require a written document which is usually a trust deed. The trust lawyers at Brander Smith McKnight are highly experienced in meticulously drafting trust deeds and can assist you. A trust deed sets out:

The objectives of the trust fund
The beneficiaries of the trust
The trustee and appointer of the trust
The method of distribution of trust income and assets

There are four parties involved in any trust deed:

The settlor, who sets up the trust and is usually a lawyer. The settlor cannot be a beneficiary and has no further involvement.
The trustee, who is the legal owner of the trust property and must act in accordance with the trust deed and in the best interests of the beneficiaries.
The appointer, who has the power to appoint and remove trustees in accordance with the trust deed. This usually happens when a trustee passes away or can no longer manage the trust.
The beneficiaries, who are the people who benefit from the income and assets of the trust. The beneficiaries do not have ownership of the trust assets.

How long does a Trust last?

The term of a trust will be as nominated in the trust deed but cannot be longer than 80 years, this is set out in the Perpetuities Act 1984 (NSW). The end date of a trust is also known as the vesting date and is the point at which beneficiaries become absolutely entitled to the trust’s assets. At the end of the trust the trustee must distribute the property to the beneficiaries.

Types of Express Trust

The most useful kinds of trusts are trusts that are established intentionally by the parties and are usually documented in a trust deed. Examples are discretionary trusts, family trusts (which are a type of discretionary trust), unit trusts and testamentary trusts.

Discretionary Trusts

These are set up using a trust deed and comply with the requirements of a trust, that is there must be a trustee, a beneficiary and trust property. As the name suggests a discretionary trust allows the trustee to distribute money or other trust property to beneficiaries at the discretion of the trustee. This includes varying the amount to be distributed and selecting the beneficiaries to receive any distribution.

Family Trusts

Family trusts are an example of discretionary trusts. These are used by families to hold family assets such as property or a family business. The beneficiaries of the trust will be the family members.

Advantages of Discretionary, (including Family) Trusts

Asset protection, discretionary trust provides asset protection because a person may hold onto their assets without a specific apportionment or legal entitlement to income, profits, shares or interests to the trust assets. This means that a creditor will generally have no legal access to any assets or funds held by the trust.
Tax advantages, a discretionary trust may offer tax advantages because generally these trusts don’t pay income tax. Rather, the beneficiaries pay tax on their share of the trust’s nett income.
Beneficiary Income, a discretionary trust can be used to distribute income to beneficiaries at the discretion of the trustee to meet a number of objectives including tax minimisation through for instance income splitting.

Disadvantages of Discretionary, (including Family) Trusts

Expenses involved in setting up the trust fund and preparing tax returns.
Liability of trustees, while trusts offer excellent protection for the beneficiaries, the trustee is personally liable for any trust debts incurred. These may be managed by providing an indemnity in the trust deed and using a company as the trustee.

Unit Trusts

A unit trust is a trust that is often used to pool funds for investments, such as property investment and development. They are sometimes used by superannuation funds. Each beneficiary in a unit trust must hold a certain number of units and the ownership of the trust property and the distribution of trust income is fixed in accordance with the number of units held. This is an important distinction from a discretionary trust. For this reason it is often preferred by groups of investors who don’t know each other well or are not part of the same family.

Hybrid trusts are a subgroup of unit trusts, where the trustee has a degree of discretion. These are uncommonly used.

Advantages of Unit Trusts

It is a safer option for holding trust with unrelated or little known parties.
It is a useful trust for real estate otherwise real property because transfers of units will not incur stamp duty. This is subject to land rich calculations. The trust lawyers at BSM can apply to the Office of State Revenue to see if this applies.
Another reason that unit trusts are used for investment in real estate is because taxation is calculated for the beneficiary or unit holder not the trust as a unit trust is not considered a tax paying entity. This means that upon the sale of real estate the beneficiary or unit holder may be entitled to a 50% discount on capital gains tax. This is not available when the real estate is owned by a company.

Disadvantages of Unit Trusts

Unit trusts provide less asset protection than a discretionary trust because each beneficiary has a fixed entitlement in proportion to their holding units. This means that the beneficiaries assets and income may be available to creditors.

Testamentory Trusts

This is a trust established under a will, but is not the same trust as the deceased estate. It is usually a form of discretionary trust depending on the drafting of the testamentary trust clause. Testamentory trusts are often established in a Will for the benefit of family members, particularly children under the age of 18.

Advantages of Testamentary Trusts

It can provide tax benefits to beneficiaries because taxable income can be spread over different years.
It provides flexibility in regards to any decision about the timing of any sale of real estate which may trigger a capital gains tax event.

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Types of Non-Express Trusts

Resulting Trusts

This is an uncommon form of trust. These may arise when payment is made for property and the property has not yet been transferred to the payer. This only becames relevant if a dispute over ownership arises.

Constructive Trusts

A constructive trust may arise where one party has contributed to property. It is a means by which that party can seek to recover those funds or property. It is described in the case of Muchinski v Dodds 1985 (HCA) where one party paid for the property and the other developed the property. Upon separation, the court held that the party that developed the property had a constructive trust over the party. This entitled them to be awarded for the value of their work on the property.

FAQ’s

How long does a trust deed last?

A term of a trust deed can be nominated in the trust deed but cannot be longer than 80 years.

Why choose BSM Trust Lawyers?

The trust lawyers at Brander Smith McKnight are highly experienced in establishing and maintaining commercially advantageous trust structures. Contact Brander Smith McKnight law firm Sydney for a free 20 minute consultation.

What is the benefit of a Family Trust?

A family trust is an example of a Discretionary Trust. This means that the trustee of the trust has the discretion to proportion assets such as income, profits or shares that individual beneficiaries are assigned and the timing at which they receive these assets. This allocation can be changed repeatedly at the discretion of the trustee and therefore can provide tax advantages and protection of assets from creditors.