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Family Trusts: A Plain English Guide for Australian Families of Average Means, 4th Edition

Family Trusts: A Plain English Guide for Australian Families of Average Means, 4th Edition

N. E. Renton

ISBN: 978-1-742-16899-9

Jan 2012

400 pages



This is a plain English manual for ordinary Australian families and small business proprietors. It will help them to decide whether to set up a family trust, to understand the advantages and disadvantages of this useful legal concept and to discuss the issues more intelligently with their professional advisers.

All aspects of setting up and running a family trust are dealt with in this book, including investment aspects and the taxation and social security rules affecting trusts and their beneficiaries. It discusses discretionary and unitised trusts, as well as trust deeds and the roles of the settlor and the trustees. The use of trusts for children with an intellectual disability, philanthropic foundations and the winding up of trusts are also covered.

The fourth edition of Family Trusts has been greatly expanded. In addition to the updated real-life case studies that help to flesh out this important subject, there is new material on the qualifications needed by trustees, hybrid trusts, the risks of borrowing by trustees, non-resident beneficiaries, resettlements, minutes of trustee meetings, protecting assets against creditors, bankruptcy and divorce.

About the author xx

Foreword xxiii

Preface xxv

1 The concept of a trust 1

2 Modern family trusts 10

3 Advantages 21

4 Disadvantages 31

5 Types of trustee 36

6 The trustee 45

7 The trust deed 62

8 Discretionary trusts 73

9 Unitised family trusts 78

10 Administrative aspects 84

11 Investment principles 94

12 Investment categories 107

13 Income tax 121

14 Capital gains tax 140

15 The taxation of discretionary trusts 155

16 The taxation of unitised trusts 166

17 Other tax issues 170

18 Social security 180

19 Alternatives to family trusts 198

20 Trusts for children with a disability 208

21 Estate planning 214

22 Family issues 225

23 Some further thoughts 236

24 The goods and services tax 243

25 Charities and philanthropic trusts 256

26 Winding up a trust 264

27 The abandoned tax changes 271

28 Selected questions and answers 275

29 Miscellaneous 303

Appendix A: Outline of a simple inter vivos trust 314

Appendix B: Wills and trusts compared and contrasted 315

Appendix C: Model resolution for trust distributions 317

Appendix D: Marginal income tax rates for 2007–08 318

Appendix E: Average rates of tax 2007–08 325

Appendix F: Ralph got it wrong 326

Appendix G: Diff erences between trust deeds and powers of attorney 329

Appendix H: Numbers of trusts 330

Appendix I: Numerical examples 331

Appendix J: Useful internet links 334

Appendix K: The Financial Services Reform Act 2001 342

Appendix L: Further information 346

Glossary 349

Index 375