obiter | The ByLawyers Blog

New Publication – Trusts Guide – FED

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By Lawyers have a comprehensive new Trusts Guide.

The new guide contains commentary and precedents for establishing a new trust, amending an existing trust, or bringing a trust to an end through vesting or termination.

This new publication is a substantial enhancement of the previous trusts section in our Companies, Trusts, Partnerships and Superannuation guide.

The new detailed Trusts Guide deals with the various types of trust structures, including:

  • Discretionary trusts;
  • Fixed unit trusts;
  • Non-fixed unit trusts;
  • Hybrid trusts;
  • Charitable trusts; and
  • Special disability trusts.

The commentary discusses important issues affecting the use of trusts including:

  • The financial planning and asset protection merits of different trust structures;
  • The rights and obligations of beneficiaries, unit holders and trustees, including corporate trustees;
  • Taxation requirements including income tax, land tax and trust loss provisions; and
  • Common dispute resolution methods.

The new guide also contains many essential and useful precedents such as:

  • A unit trust deed that meets the requirements of a fixed trust for land tax and loss-streaming purposes;
  • A unit trust deed creating multiple classes of unit holders;
  • A discretionary trust deed;
  • A combined unit holder and shareholder agreement;
  • A hybrid trust deed;
  • A charitable trust deed;
  • A special disability trust deed; and
  • Numerous supporting documents, such as deeds of amendment.

The new Trusts Guide is available to LEAP companion product subscribers through the Guides and Precedents button in a LEAP matter, or to By Lawyers website subscribers as part of the Companies, trusts, partnerships and superannuation guide.

Trusts – New precedent – Deed of termination

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Following a subscriber request, we have added a new precedent to our Unit Trusts Guide, being a Deed of termination of trust.

There are many reasons a client may wish to terminate or dissolve a trust prior to the vesting date. There are also several methods of bringing a trust to an early end including:

  • complete distribution of the trust property by the trustee;
  • revocation by the settlor or trustee;
  • the beneficiaries or unit holders consent to end the trust; and
  • a Court ordered termination of trust.

When brining a trust to an end there are many important issues for the trustee to consider including:

  • the procedures prescribed by the original trust deed;
  • all possible creditors; and
  • all possible taxation consequences – particularly CGT arising from the sale of any trust assets or in specie distributions.

The need for a deed confirming the termination of the trust was suggested by one of our subscribers. Having considered the issue, By Lawyers have created a simple new precedent Deed poll, terminating the trust. This will allow practitioners to ensure that when their trustee clients terminate a trust it is evidenced and supported by proper documentation.

At By Lawyers we are always grateful for any feedback on our precedents and will happily accommodate subscriber requests for new documents where appropriate.

 

 

SMSFs – New precedents – Retainer instructions

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We have published two new Retainer Instructions precedents in our Self Managed Superannuation Funds Guide.

The Retainer Instructions – Self managed superannuation fund is designed to assist practitioners when taking instructions from clients who are establishing a new fund. It covers all of the essential information required for the superannuation trust deed, including trustee and member details.

The Retainer Instructions – Existing self managed superannuation fund is designed to be used when a client wishes to make changes to an existing self managed superannuation fund that has already been established. It can be used to record instructions for a variety of situations including:

  • changing the fund trustee;
  • amending the rules of the fund;
  • making a new death benefit nomination or reversionary pension nomination; and
  • establishing a limited recourse borrowing arrangement.

Retainer instructions, which appear in “Getting the matter underway’ on all By Lawyers matter plans, are not only a useful precedent for file opening and matter management, they are a critical risk-management tool ensuring that all necessary information is obtained from the client and recorded.

Superannuation and downsizing

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The By Lawyers Self Managed Superannuation Guide has been updated to provide greater detail about contributions to superannuation as a result of residential downsizing.

From 1 July 2018, superannuation fund members aged 65 and over who downsize by selling their principal place of residence are able to contribute up to $300,000 from the proceeds of sale into their superannuation fund as a non-concessional contribution. Both members of a couple can take advantage of the concession for the same family home, allowing up to $600,000 per couple to be paid into superannuation from the sale proceeds of the family home.

Downsizing contributions are exempt from inclusion in the $1.6 million total superannuation balance cap. Instead, the contribution is included when the total superannuation balance is recalculated at the start of the new financial year.

This measure is available to superannuation fund members who have held their principal place of residence for 10 years or more, for contracts that are exchanged after 1 July 2018. The contribution must be made to the fund within 90 days of settlement of the sale.

Importantly, despite the term ‘downsizing’, there is in fact no requirement to purchase another home.

For more information about superannuation contributions, see the By Lawyers Self Managed Superannuation Funds Guide.

Joint venture agreements – Property development projects

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There are many different property development projects for which a joint venture structure may be suitable. Some common examples include:

  • A project where a property owner and builder agree to build a duplex on the basis that the builder and the owner each receive a unit by partition on completion;
  • Joint property owners who develop the property using a third party builder;
  • A developer and a property owner who develop a property by engaging a third party builder.

To help you structure these projects, By Lawyers have added a new precedent: Joint Venture Agreement – Townhouses development project.

This document is located in our Joint Ventures Guide and may be used in any of the situations listed above.

Our Joint Ventures commentary has also been updated to discuss use of the new agreement and the accompanying documentation necessary.

The By Lawyers Joint Ventures Guide ensures that practitioners can feel confident drafting agreements that capture the full complexity of their clients’ property development projects.

Companies, Trusts and Partnerships – Special disability trusts

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By Lawyers has expanded our comprehensive Companies, Trusts and Partnerships guide to include commentary and precedents covering special disability trusts.

A special disability trust can be established to provide for the care and accommodation of a disabled family member and if compliant will allow the disabled beneficiary of the trust to retain their full entitlement to a Centrelink pension. There are also generous concessions for contributions to a compliant special disability trust.

The commentary covers everything a practitioner needs to know about establishing a special disability trust for their clients, including:

  • beneficiary eligibility requirements;
  • contribution and concession guidelines; and
  • the permitted use of special disability trust funds.

The By Lawyers Special Disability Trust Deed is provided and includes all of the mandatory clauses from the model trust deed for special disability trusts published by the Department of Social Services, as required to comply with the Social Security Act 1991 and the Social Security (Special Disability Trust) Guidelines 2011.

 

Self managed superannuation funds – Updated commentary and new precedents

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Our very popular Self Managed Superannuation Funds Guide has been updated to include some new commentary and precedents dealing with death benefits and reversionary pensions.

New or enhanced precedents include:

  • a detailed new Pension Payment Agreement between the trustee and the member setting out the terms upon which pensions are to be paid from the fund;
  • an updated Product Disclosure Statement, from the fund to its members, explaining the basis for establishing a pension and the procedure involved in paying pensions from the fund;
  • a letter to the client – i.e.: the trustee of the self managed superannuation fund – enclosing and explaining the documentation; and
  • comprehensive Nomination forms, for death benefits and reversionary pensions, giving the member maximum permissible choice and flexibility as to how their superannuation is handled after their death.

These changes clarify and streamline the process of setting up pensions in a self managed superannuation fund, making a death benefit nomination or reversionary beneficiary nomination, in accordance with legislative requirements and allow users to give their clients the best advice and assistance.

New Joint Ventures Guide

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Within the must have commercial publication ‘Companies, Trusts, Partnerships and Superannuation’ we have created a new guide focusing extensively on the topic of Joint Ventures.

The guide contains commentary and precedents that have been drafted to provide an end to end solution for the joint venture trading structure such as:

  • establishing a new joint venture and the joint venture agreement;
  • a project management agreement;
  • a joint venture agreement for property development projects;
  • methods for selling an interest in a joint venture; and
  • withdrawal and terminating a joint venture.

The commentary also discusses the taxation and property ownership implications of operating under a joint venture structure.

 

New Partnerships Guide

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Within the must have commercial publication Companies, Trusts, Partnerships and Superannuation we have created a new guide, commentary and precedents focusing extensively on the topic of Partnerships.

Partnerships covers all aspects of setting up and running a business using partnership trading structures including:

  • general partnerships;
  • limited partnerships; and
  • incorporated limited partnerships.

The commentary, guide and precedents provide an end to end solution for partnership businesses such as:

  • establishing a new partnership and the partnership agreement;
  • adding new partners or making changes to profit share structure of an existing partnership;
  • removing or expelling a partner; and
  • dissolving a partnership and business succession arrangements.

The commentary also discusses the taxation and property ownership implications of operating under a partnership structure.

The Companies, Trusts, Partnerships and Superannuation guides also provides detailed information about other business structures including companies, trusts and self-managed superannuation funds.

Companies – new precedents

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New precedents have been added to the publication Companies, Trusts, Partnerships and Superanuation

Put and call option agreement
Put and call option precedent for use by a private company allowing the vendor to grant the purchaser a call option over the shares and the purchaser to grant the vendor a put option over the same shares.

Company constitution
Adding to a comprehensive set of commercial incorporation tools for practitioners and their clients, the constitution is for company members who elect to use a constitution, instead of the replaceable rules to guide their internal governance.

The company constitution precedent includes the general rules governing the relationship between a company’s directors, secretary and shareholders and the activities of the company and can be easily customised to suit individual clients’ requirements.

Table of Replaceable Rules

For company members who elect to use the rules to guide their internal governance. The main advantage of the replaceable rules is that a company who uses them can ensure that they are always up to date with developments and changes in regulation.

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