Before You Distribute Income… Read This First
With 30 June fast approaching, there’s one crucial document you can’t afford to ignore — your trust deed.
In this short video, I explain how even small oversights — like assuming your spouse is a beneficiary or failing to separate trustee and beneficiary roles — can lead to big headaches.
👉 [Watch now] — and find out how to avoid common traps before you lock in your trust distributions.
If you're unsure what your deed actually says (or what it means), send it our way. We're happy to help review it and keep you compliant and protected.
Don’t leave it to chance. EOFY waits for no one.
VIDEO TRANSCRIPT
Ross Millen:
Hi. Well, the end of the financial year is almost upon us, and last time I mentioned it was important if you had a discretionary trust to make sure that the trustee exercised its discretion and had a signed resolution as to how the income of the trust was going to be distributed before the 30th of June. And also, of course, if you're making any capital distributions.
Now, this is so trite, it's amazing, but everything depends on the trust deed. We see many examples where people have done things just thinking that that's what the trust deed provides, and they haven't actually read the exact wording of the trust deed.
Now, for instance, we had a situation where someone was making annual income distributions to their second wife, but when we looked at the trust deed, it said that the spouses of the person's children were beneficiaries. Didn't actually mention his spouse. So we had to look in the trust deed to make sure there was power to add new beneficiaries and execute a deed and make sure all that was done. But that was an example where someone was just thinking that that's what the trust deed would provide.
Another thing to watch out for is we've seen where someone would say that the trustee happens to be one of the beneficiaries as well. Now, that can be a little bit risky at times because you have to have a separation between the trustee and the beneficiaries. But the problem with this trust deed was that the sole beneficiary of the capital of the trust when the trust vested was in fact the same company as the trustee. So no clear distinction between trustee and beneficiary. Anyway, we were able to solve that problem for the client.
So what we're saying is that make sure you read the trust deed. If you're not clear what it provides, send us a copy. We can review it. We can make sure that your distributions are in accordance with your trust deed. Remember, I'm Ross Millen from Millens, here to help.
