At Antunes Lawyers, we have the expertise and legal knowledge to set up the most cost-effective and flexible trust structure that best suits our clients’ requirements. We also understand that there are circumstances in which our clients will need to ‘wind up’ their trusts.

Winding up a trust

It is a requirement that trusts are to be wound up or ‘vested’ in their beneficiaries within a specified time period, known as the ‘perpetuity period’. Most discretionary trust deeds provide a date, or an event on which the interests in the trust property must ‘vest’. There is a statutory limit of 80 years, so if the trust deed is silent a trust must be wound up after 80 years of it being settled.

Why would a trust need to be ‘wound up’?

  • When the trust deed requires it to be wound up;
  • When the perpetuity period expires;
  • When all property under the trust has been distributed among the beneficiaries;
  • When the trust no longer holds any “property” including no longer holding the settled sum
  • Where all of the possible beneficiaries of the trust are of legal age they may direct the trustee to terminate the trust and distribute the property – (Saunders v Vautier)
  • Court Order.

Why it is important to validly terminate and wind up a trust

A trustee is personally liable for liabilities of the trust. If a trust is validly wound up, the trustee, the beneficiaries and other stakeholders can be confident that assets have been fully realised, all liabilities effectively satisfied and all relevant taxes paid that the trustee’s duties and obligations under the trust deed have ended.

How we can assist:

We can provide you with comprehensive advice on the most effective ways in which to wind up your trust that meets the trust deed’s requirements and ensures the trustee is complying with its obligations.

The ways in which our lawyers can assist include:

  • Identifying and complying with the procedures prescribed by the trust deed;
  • Obtaining the relevant consents that are required by the trust deed;
  • Identifying all of the potential beneficiaries and stakeholders affected by the winding up of trust;
  • Consideration of all potential creditors in relation to the trust;
  • Consideration and compliance with all potential tax obligations, particularly capital gains tax; If not done correctly, the trustee of the trust might be subjected to the top tax rate of 45% and the trustee’s personal assets will be exposed to the creditors of the trust.
  • Completing all necessary requirements to validly ‘wind up’ the trust.

Talk to one of our expert lawyers today.