Owies case decided by the Victorian Court of Appeal in 2020 has highlighted a number of lessons for those who have trusts, or those who wish to establish a trust, should heed:

  1. Are the words in the trust deed too complicated or ambiguous to understand? Trust deeds should be written in plain English.
  2. Is the trust deed one purchased from a “trust deed provider”? One size does not fit all. The trust deed should be drafted to reflect your intentions. The trust purposes should be bespoke to you.
  3. Can you change the wording in your trust deed? The power of amendment needs to be wide and clear to ensure amendments are validly made.
  4. Do you know how to operate your trust? You should be advised on how to operate your trust and how the trustee should make decisions.
  5. If you control your trust while you are alive, do you know who will control it when you pass away?

Trust deeds need to provide the succession plan which you intend and which is appropriate for your family. You must treat your trust deed as seriously as you would treat making your will—similar considerations in making your will need to be applied when setting up your trust.

In Owies’ case, the Court decided that:

  1. The amendments made to the trust deed were not validly made and did not operate, so what was intended did not happen.
  2. The trustee had not exercised its discretion in accordance with its obligations and the exercise of the trustee’s discretion was a breach of trust in a number of previous financial years in which the trustee made trust distributions. The distribution resolutions were voidable.
  3. The trustee should be removed and replaced with an independent trustee.

The last thing you would want is a dispute between the beneficiaries of the trust and the trustee either while you are alive or after you pass away, which could result in the trust being managed by an independent trustee who will be paid commercially for their work in administering the trust.

If you:

(a) Have a trust;

(b)Want to set up a trust;

(c) Are an unhappy beneficiary of a trust; or

(d) Want to do a will

Please call our expert trust and estate lawyers at Antunes Lawyers

If you have questions, contact our team today.

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The articles on this website comprise legal general information and not legal advice. The general information presented here must not be relied upon without legal advice being sought. In the event that you wish to obtain legal advice on the contents of this general information you may do so by contacting our office or your existing solicitor.