Trust law in Australian estates: where to start
Trusts are used to control how assets and income are managed and distributed. In estates and family planning, the most common options are:
- Family (discretionary) trust for flexible income splitting and asset protection.
- Testamentary trust inside a will to protect beneficiaries and enable tax-effective distributions to minors after death.
- Unit trust for co-investment where ownership is held via units (often used with family or business partners).
- Protective or Special Disability Trust for a vulnerable person with Centrelink/NDIS considerations.
Important: This page provides general information only, not legal or tax advice. Get tailored advice before acting.
Compare trust options
| Trust type | Best for | Key pros | Watch-outs |
|---|---|---|---|
| Family (Discretionary) Trust | Ongoing family wealth or business profits | Flexible distributions; asset protection features | s100A risk if beneficiaries don’t benefit; Division 7A with company beneficiaries; annual resolutions |
| Testamentary Trust | Estate planning and protecting beneficiaries | Tax advantages for minors; protection from relationship or creditor risks | Only starts on death; careful will drafting needed; higher will cost |
| Unit Trust | Investment with defined entitlements | Clear ownership via units; easier for unrelated investors | Less flexibility; CGT duty on unit changes; deed must match reality |
| Special Disability Trust | Long-term care for a person with severe disability | Centrelink concessions; clear allowable expenses | Strict rules; trustee reporting; limited spending categories |
Trust costs and typical timelines
Indicative professional fee ranges in Australia (actual quotes depend on deed complexity, tax structuring, urgency and your state):
- Family (discretionary) trust deed: $900–$2,500 (standard) or $2,500–$6,000 (bespoke asset protection, corporate layers, guardian clauses).
- Unit trust deed: $1,200–$3,500 (standard) or $3,500–$7,500 (custom, multi-class units, investor rights).
- Testamentary trust in a will: +$1,800–$4,500 per trust on top of will fees; complex blended-family estates can be higher.
- Amendments/variations: $750–$3,000+ depending on whether court approval or resettlement risk advice is required.
- Annual trust accounting & tax return: $1,200–$3,000+ (bookkeeping, financials, trust return); standalone trust return lodgement typically $350–$900.
Timeframes: simple deeds are often completed within 2–7 business days once instructions and ID checks are done. Complex estate structures can run 2–4 weeks including tax and asset-holding advice.
Key Australian trust tax and compliance risks
High-attention areas
- s100A reimbursement agreements: risk where a beneficiary is made presently entitled but does not actually benefit from the distribution. See ATO guidance on s100A.
- Division 7A: unpaid present entitlements (UPEs) to a company can be treated as loans unless placed on compliant terms.
- Family trust election (FTE) and interposed entity elections (IEE): needed to safely stream franking credits and manage loss/trust tracing rules.
- CGT events E1/E2 (resettlement): major variations or changing the substratum may create a new trust and trigger tax/duty.
- Distribution resolutions: trustees generally must make valid resolutions by 30 June (or earlier if the deed says so) to avoid default assessments at top rates.
Helpful official guidance
State-by-state trust deed stamping and notification
Rules vary by state/territory. Some impose nominal duty on certain trust declarations; others focus on notification and duty only where dutiable property is involved. Deadlines and processes change—confirm via the links below. Late stamping can attract interest and penalties.
| State/Territory | Typical timeframe | Notes and process |
|---|---|---|
| NSW | Within 3 months of execution | Charge may apply to declarations of trust. Lodge via Revenue NSW. |
| VIC | Confirm current rules | Generally no duty for non‑dutiable trust deeds; duty applies if dutiable property involved. See SRO Victoria. |
| QLD | Often 30 days for dutiable transactions | Check when a declaration is dutiable and lodgement rules at Queensland Revenue Office. |
| WA | Confirm current rules | Nominal duty may apply to some declarations. See WA Department of Finance – Duties. |
| SA | Confirm current rules | Check declarations and time limits with RevenueSA. |
| TAS | Confirm current rules | See Tasmanian State Revenue Office for duty/notification requirements. |
| ACT | Often 90 days for dutiable transactions | Guidance at ACT Revenue Office. |
| NT | Confirm current rules | See NT Territory Revenue Office. |
Documents you’ll likely need
- Draft or existing trust deed and any amendments/variations.
- Company constitutions (if using a corporate trustee) and ASIC details.
- Appointor/guardian clauses; replacement/retirement provisions.
- Minutes, trustee resolutions and distribution resolutions (particularly by 30 June).
- Asset schedule: bank, brokerage, property titles, unit registers, loan agreements.
- Tax history: prior trust returns, FTE/IEE copies, UPE records, Division 7A loan schedules.
- For testamentary trusts: your current will, family structure and beneficiary needs.
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Trust Law FAQ
What is the difference between a family discretionary trust and a testamentary trust?
A family (discretionary) trust is set up during life and lets the trustee choose how income/capital is distributed among beneficiaries. A testamentary trust is created by a will and only starts after death; it can give tax advantages for minor children and asset protection in estates. Family trusts are used for ongoing family wealth and business; testamentary trusts are an estate planning feature tied to a will.
How much does it cost to set up or update a trust in Australia?
Typical ranges: Discretionary trust deed $900–$2,500 (standard) or $2,500–$6,000 (bespoke/complex). Testamentary trust drafting uplift on a will $1,800–$4,500 per trust (in addition to will fees). Unit trust deed $1,200–$3,500. Amendments/variations $750–$3,000+. Annual accounting/tax compliance $1,200–$3,000+ per trust; trust tax return $350–$900. Court-approved protective or special disability trusts are usually quoted individually.
Do I need to stamp a trust deed and by when?
Some states require stamping or notification within set deadlines even if only nominal duty applies. NSW generally requires stamping within 3 months. Other states/territories have different rules or may not require stamping for non-dutiable trust deeds. Always check your revenue office—late stamping can attract penalties.
What are the key annual compliance tasks for trusts?
Common tasks: make a valid distribution resolution by 30 June (or earlier if deed requires), prepare financials and the trust tax return, report TFN/ABN updates, manage unpaid present entitlements, review family trust/interposed entity elections if franking credits are used, consider Division 7A where companies are beneficiaries, and keep trustee minutes.
What tax risks should trustees be aware of in Australia?
Highlighted ATO risk areas include: s100A reimbursement agreements (particularly adult children distributions without benefit), Division 7A for UPEs to corporate beneficiaries, CGT events E1/E2 if variations cause a trust resettlement, and incorrect or late distribution resolutions. Consider family trust elections where applying franking credits.
How do I find a trust lawyer near me?
Use the location links on this page to reach NSW, VIC, QLD, WA, SA, TAS, ACT or NT trust and estates lawyers. Or submit the form with your suburb—our Australian team will match you with a nearby practitioner for a no-obligation chat.
References and official sources
- ATO: Trust resolutions and distribution timing
- ATO: Family trust and interposed entity elections
- ATO: Division 7A and UPEs
- ATO: CGT events E1/E2 (trust resettlement)
- Services Australia: Special Disability Trusts
- Revenue NSW: Declaring a trust
- SRO Victoria: Duties
- Queensland Revenue Office: Duties
- WA Department of Finance: Duties
- RevenueSA: Stamp duties
- Tasmanian SRO: Duties
- ACT Revenue Office: Duties
- NT Territory Revenue Office: Duties
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