PPSS

They could also have the deed amended so as to make themselves beneficiaries – this may mean stamp duty and CGT would be payable on the whole estate, but this may be small considering the overall benefits to be gained.

Lets use your grandfather as an example. I am only guessing here too.

Trustee is XYZ Pty Ltd with GF as director and 2 shares held by GF and GM.

The trust is set up so that Bart Simpson is the Appointor. Bart is the friend and accountant of GF and GM.

GF and GM die. They leave the shares of the trustee company XYZ Pty Ltd to you Stephen. You think great, I now control the trust and I will get the trust to buy myself a car and holiday home.

Bart thinks I don't like Stephen so he sacks XYZ Pty Ltd and appoints his wife as trustee. Each year the wife distirbutes all the income to herself and Bart.

You protest, but cannot do anything legally as the deed states the trustee has discretion on who to distirbute to.

If you were appointor you could appoint yourself as trustee and then distribute yourself all of hte trust assets.

A director is not part of the trust, but part of the company which may be the trustee of the trust.

Yes I have heard of specal disability trusts. You should look at getting one of these set up under your grandfather's will. Lots of tax and centrelink advantages.

Having assets in a trust does not stop a wife or exwife from making a claim under the Family Law Act also under the Succession laws she could still make a family provision claim with the trust assets forming part of the estate under a notional estate order – but this will depend on the situation. The further your father is from it the better. but you also have to think about yourself and what if you get married etc.

The appointor has all the power – so you should try to get this role if possible. You can do this by having the deed amended.

makes you want to stick to shares – no land tax and no stamp duty.

The trustee controls the distribution of the income and capital of the trust – but they must act according to their powers in the trust deed.

So you want to control the position of trustee by being the trustee or by being the director and majority shareholder of the trustee company. You also want to be the appointor or control the role of appointor because the appointor can remove the trustee.

You cannot really leave control of the trust in the will. The trust deed will control who the successor trustee and/or appointor is. If the shares of the trustee company are held by someone personally (ie not in a separate trust) then these can be willed.

If the trustee is the company he would be director. Or he himself could be the trustee of the trust.

The grandfather's trust assets are unlikely to fall into the hands of your father. The control of the trust may, but not the assets themselves. The solicitor may not have the deed, or a copy, unless he was the one that created it. Not sure if he would let you see it though you may have a right to see it if you are a beneficiary – but you would need to go through the trustee to do so.

Assets of a trust don't form part of a person's estate. So they cannot form part of the will. They will need to pass control of the trust on by having back up appointors to the trust and also making sure the shares of the trustee (if a company) are passed on via their will. But it is the appointor that controls the trust by hiring and firing the trustee so this is the important bit.

Any personal assets they hold can be left in the will to a testamentary trust (a post death trust). Under the tax act ITAA 1936 any income received by a minor from a will or a testamentary trust is taxed at adult rates. That means a 2 year old kid could receive $16,000 pa tax from from a testamentary trust. This is a huge sum. Imagine an extended family with 10 kids!

Income from normal trusts set up during lifetime (inter vivos)are taxed at normal rates. For kids this means $3333 pa tax free for this year and this drops to $416pa from next year. over that they pay tax at penalty rates.

So you need to get your grandfather to produce his trust deed and then see what is in there concerning the appointors. it may need to be amended. If it hasn't been amended for a while you should get them to fix it up as there have been a lot of changes and the definition of income etc used in the deed will probably need to be changed too

Sounds like large sums of money are involved. You will surely need professional advice.

Your grandfather may be able to change his will (if he still has capacity etc) to incorporate a testamentary trust so that his assets don't fall into your father's hands which will make it harder for the new wife to make a claim on these. It will also be great for asset protection generally and tax savings. But you need to carefully consider what assets the grandfather has and consider any general tax, and land tax issues too.