Trust is a legal arrangement that allows for the separation of legal ownership from the beneficial ownership of an asset.
An example of a common trust structure in Australia is a Superannuation Fund where the member is the beneficial owner however the legal ownership ie. the control, is held by the trustee of the super fund.
The trust structure includes the trustee who becomes the legal owner of the trust. Whereby they control the trust assets.
The trust structure also includes the beneficiary. The beneficiary is the beneficial owner of the trust assets. In general, trusts can have multiple beneficiaries and a beneficiary can be an entity, ie a company. However when it comes to SDT there can only be on beneficiary and they have to qualify.
The trust deed is a document that outlines the rules and guidelines of what the trustee can do with the assets for the benefit of the beneficiary. When it comes to SDT that trust deeds has to have certain rules to qualify.
At the establishment of the trust a Settlor has to donate an amount into the trust. The settlor cannot be the beneficiary or the trustee. The amount can be as nominal as $10.00. Usually the professional that helped to establish the trust ie, accountant or lawyer will be the settlor.
The trust deed can nominate an appointer. The appointer has the power to replace the trustee and ultimately it is the most powerful position of the trust.
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