Trusts & Asset Protection
Trusts and asset protection advice in Melbourne. Orange Legal Group establishes family trusts, unit trusts and advises on structures for tax efficiency and asset protection.
Frequently Asked Questions
- What is a discretionary trust?
- A discretionary trust is a trust in which the trustee has discretion to determine how income and capital is distributed among a class of beneficiaries in each year. This flexibility makes them a popular vehicle for family asset holding and income splitting.
- What is the difference between a discretionary trust and a unit trust?
- In a discretionary trust, the trustee has discretion to distribute income and capital — beneficial interests are not fixed. In a unit trust, beneficial interests are divided into fixed units — each unitholder is entitled to their proportionate share. Unit trusts are more commonly used for property investment and joint ventures.
- What happens when a trust vests?
- Most discretionary trusts have an 80-year vesting date. When the trust vests, it must be wound up and assets distributed to the default beneficiaries. Pre-vesting restructuring is critical to managing the duty and CGT consequences of this process.
- Can I change the terms of an existing trust deed?
- In most cases, yes — but trust deed variations must be carefully documented to avoid being treated as a resettlement of the trust (which can have significant duty and CGT consequences). Always obtain legal advice before amending a trust deed.
- Do I need a trust for asset protection?
- Trusts can provide significant asset protection — particularly discretionary trusts where the beneficial interest is not directly owned by an individual. However, trusts are not impenetrable and their effectiveness depends on how they are structured, funded and administered. We advise on asset protection strategies as part of a broader structuring review.