WHAT IS INCLUDED

Most trusts are created for clients by the execution of a deed of trust by the trustee, the deed setting out the express terms of the trust, and by the “settlement” on the trustee of a nominal sum, say $10, by the “settlor”, who is also a party to the deed. It is common practice for a trust to be established by the settlement of a nominal sum, say $10, with the trustee on the creation of the trust while the other assets of the trust are transferred later by way of purchase, with the necessary funds being loaned to the trust for the purpose. The reason it is done this way is to minimise (stamp) Duty.

Unit Trusts

The flexibility of a unit trust often results in its choice as the preferred structure for many commercial ventures where the units are generally held by the trustee of each investor’s family discretionary trust.

A unit trust created by the precedent is created by a deed between a trustee and the “initial unit holder” who contributes an amount of money which establishes the trust and creates units held by the initial unit holder. Thereafter, units can be issued to the other investors. There must be no more than 20 unit holders. Under s 601ED of the Corporations Act 2001 (Cth), the unit trust must be a registered managed investment scheme if there are more than 20 unit holders.

FULL COMMENTARY WITH PURCHASE

This does not represent Legal Advice by Precedents Online or its Authors.