It may be desirable, in certain circumstances, for a Trustee of a Family Discretionary Trust to exercise its power to vest the Discretionary Trust prior to the vesting date set out in the Trust Deed. Vesting the Trust would be relevant in circumstances where the Trust is of no further use, for example where the major Trust assets have been sold or are contemplated being sold.
Family Trusts usually have a life span of 80 years. However, sometimes the Trust is no longer needed and it may be desirable for the Trustee to exercise their power to vest the Trust prior to the vesting date set out in the Trust Deed.
The Family Trust Vesting Document allows for an “inspecie distribution” of 100% or partial distribution of a particular asset or assets to certain beneficiaries and/or to liquidate the Trust assets and distribute the balance of the proceeds of the sale to certain beneficiaries after discharging the Trust liabilities.
Before vesting your Trust, you should obtain legal and accounting advice regarding the consequences of the vesting. In particular, there may be tax implications and stamp duty implications. The Trustee should also obtain advice on its obligations to Trust creditors and to the Trust’s beneficiaries.
Contact us to find out more or to arrange a consultation with an experienced Trust lawyer in Sydney.