Family trust deed review checklist (AU)
Legacy trust deeds often lack the powers and definitions required for modern tax planning. This checklist covers the 12 structural issues that most commonly need a deed variation.
This is a 12-step family trust deed review checklist. It covers appointor and trustee powers, beneficiary definitions, streaming powers, vesting, variation powers, and common problem clauses that drive s 100A, family trust election, and foreign trustee duty exposure. Use it at intake on any existing trust.
The checklist
Identify parties, appointor, and settlor
Confirm current appointor, trustee, settlor (original), and any custodians. Identify the succession regime for appointor.
Review trustee powers and delegations
Review trustee investment, borrowing, business, and property powers. Identify any restrictions.
Beneficiary definitions
Review primary, general, secondary, and takers-in-default definitions. Check whether corporate beneficiaries and foreign residents are included.
Streaming powers
Confirm the trustee has express streaming powers for capital gains and franked distributions consistent with Divs 115-C and 207.
Definition of income
Check the definition of income — specific definition, s 95 alignment, or trustee discretion. Impacts present entitlement.
Resolution timing requirements
Confirm the resolution timing — some deeds require resolution before 30 June, others require before a balance date.
Vesting date and extension
Check the vesting date (perpetuity) and whether trustee has power to extend (and whether extension is possible under state perpetuities law).
Variation power
Review the variation power — what can be varied, who must consent, and any restrictions (settlor alive, no re-settlement).
Appointor succession
Confirm appointor succession mechanism — on death, incapacity, or retirement. Misaligned succession causes family disputes.
Foreign trustee duty surcharge
Review foreign person exclusions in definition of beneficiaries to avoid foreign trustee duty surcharge (NSW, Vic, Qld).
Family trust election and family group
If FTE is in place, confirm the specified individual, family group, and the risk of family trust distribution tax.
Record book and historical variations
Review all deeds of variation, appointment/retirement of trustees, and change of appointor. Chain of title must be complete.
When this checklist applies
Use this checklist at intake on any new family trust file, and as an annual review item for trusts with significant assets or active trading businesses.
Common pitfalls
- Foreign trustee surcharge exposure not remedied — surcharge duty and land tax
- No express streaming powers — effective streaming fails
- Resolution timing misunderstood — trustee taxed at 47%
- Vesting date approaching with no extension power
- Broken chain of trustee appointments — validity challenges
Run this checklist on a real matter
Quillio reviews family trust deeds, flags structural issues, and drafts deeds of variation for modern tax planning. See /practice-areas/tax-lawyers or start a free trial.
Trust deed variation can trigger stamp duty and resettlement risk. Obtain specialist tax and stamp duty advice before executing variations.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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