By Michaela Schmidt and Jim Main -
Snapshot
- Be very careful in preparing a deed to remove or appoint an additional trustee.
- Remember a ‘declaration of trust’ means any declaration that any identified property is held in trust for a person though the beneficial owner may not have assented to the declaration.
- You do not need to use the word ‘declaration’ for it to be considered a declaration.
Will and Kate are an elderly couple you have been working with for a little over 12 months. You have done four jobs for them already, so you are thrilled when Will calls you again to say he wanted to discuss his new business idea.
Will tells you that he and an ex-army mate are going to set up a drone delivery service and he will become the director of the new company which is going to run the operation.
Will and Kate are concerned about Will’s personal liability and they would prefer that Will retires as a trustee of the WilKat Trust. You are aware of their trust; it owns an apartment in Griffith. Will, Kate and Will’s brother, Tom, are the trustees and the beneficiaries are Will, Kate, their children, and Tom.
Will and Kate contemplated appointing a corporate trustee but did not want to overcomplicate things, and as usual are in a rush to get things done. You prepare a deed to retire Will as trustee and transfer the apartment from Will to Kate and Tom (as continuing trustees). Will tells you he discussed capital gains tax with his accountant this morning and as there is no change in beneficial ownership, you tell Will there is $50 nominal duty payable on the transfer.
