In the realm of estate planning and asset management, trusts are an invaluable tool for safeguarding assets and ensuring their effective distribution, in accordance with your wishes. However, creating a trust is only the initial step in a lifelong journey of effective wealth management. Just like any legal instrument, a trust deed requires periodic review and subsequent updates may be required to ensure that it remains accurate and effective. Over time, it is likely that changes in circumstances, laws, and personal objectives may occur and so it is important to review and update any trust deeds accordingly. In this article, we delve into the key aspects of reviewing and updating your trust deed.

If you haven’t reviewed your trust deed or trust structure for quite some time, or you have had a significant change in circumstances, now is the perfect time to review things. At The Quinn Group, our experienced team of lawyers are well-placed to assist you with reviewing your trust. We can also advise on, and if necessary, take action to effect, any updates that might be required.

When reviewing an existing trust deed, the following aspects should be considered.

1. Locating Trust Documents and Identifying Provisions

The process of reviewing a trust deed begins with locating all pertinent documents and meticulously examining their provisions. This involves understanding the structure of the trust, its beneficiaries, the assets held within it, and the powers vested in trustees.

2. Check the Constitution of the Corporate Trustee

For trusts with a corporate trustee, it’s imperative to ensure that the trustee’s constitution aligns with the objectives and requirements of the trust. Any discrepancies or inadequacies should be addressed promptly.

3. Evaluate Trust Deed Flexibility

Assessing whether the trust deed allows for variation is paramount. Understanding any limitations or constraints on making changes is crucial for determining the scope of potential updates.

4. Identify Powers to Effect Changes

Determining who holds the power to make changes to the trust deed and understanding the prescribed procedure for exercising such power is fundamental. This may involve the settlor, trustees, or beneficiaries, depending on the trust’s provisions.

5. Analyse Implications of Proposed Changes

Before implementing any modifications to the trust deed, it’s essential to evaluate the potential implications of doing so. Consider things such as tax liability, stamp duty, and any legal ramifications. Seeking professional advice can help to navigate potential complexities and help with finding a solution that is compliant with the terms of the trust deed but also minimises any negative effects.

6. Consequences of Non-Compliance

Failure to comply with the prescribed variation procedure can have serious consequences, potentially invalidating the proposed changes or exposing the trust to legal challenges. Adhering strictly to legal requirements is imperative.

7. Understand Common Law Restrictions

Common law imposes certain restrictions on the powers to vary trust deeds, particularly concerning the alteration of fundamental trust principles or prejudicing beneficiaries’ interests. These restrictions necessitate careful consideration during the review process.

8. Seeking Court Approval

In certain circumstances, seeking court approval may be necessary in order to effect changes to the trust deed. This typically occurs when alterations are deemed substantial or when specific beneficiaries cannot consent.

Expert Advice to Review Your Trust Deed

Regularly reviewing and updating your trust deed is crucial for effective wealth management and estate planning. It helps ensure that the trust deed remains in line with your intentions and follows the law as it changes. Seeking professional guidance is strongly recommended in order to navigate the complexities of trust deed reviews and any updates that are required. Obtaining the right advice will ensure that both your assets and the interests of your beneficiaries will be safeguarded for future generations.

The team of trust experts at The Quinn Group are on hand to help with your trust deed review. Contact us by completing an online enquiry form, call 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange a meeting or teleconference.