Firstly let us set out what a Trust Deed is.
The elements of a trust are a trustee, trust property and beneficiaries. Usually this is set out in a document known as trust deed. There are different types of trusts.
As the name might suggest, a discretionary trust allows the Trustee to choose how to distribute the income and capital of the trust between the nominated beneficiaries of that trust. Usually this is done with the assistance of an accountant to minimise taxation payable by the different beneficiaries. The amount a beneficiary may receive for a distribution may vary from year to year.
A Unit Trust is more like a “fixed” Trust. Usually these trusts have units and each beneficiary will own a certain number of units in the trust. The share of the income or capital that a beneficiary will receive each year will be determined by the number of units that they own in the trust. In this instance, the trustee does not have discretion as to how the income or capital of the trust is distributed between the beneficiaries.
It is best to seek the advice of a professional to determine why you would like to set up a Trust and if so what type of trust best suits your needs..
If you are in need of establishing a Trust, contact Wollerman Shacklock on 03 9707 1155 or firstname.lastname@example.org to discuss this further.