Why do you want to find out who the beneficiary is? If it is a discretionary trust then there would be more than 1 beneficiary and likely to be several hundred possible beneficiaries. And just because someone is a beneficiary doesn't mean much. They have no right or expection to receive anything from the trust – just the possibility, which may never happen.

Also you say the a firm is the trustee? Only companies or natural persons can be trustee and it would be very unusual for a trading company to act as trustee – especially a financial planning firm.

Do you know if the trust owns any real property? If so you could do a title search on the property and find out who the legal owner is (which would be the trustee). This may also show other interests registered such as mortgages or caveats. You can then request copies of these which may lead to more clues (other beneficiaries may have lent money to the trust or have lodged a caveat etc).

If the trustee is company you can also do a ASIC search and find out who the directors are and the shareholders – often these are the people with the real control of behind the trust.

Trust deeds would also be held by lenders and accountants – though they would not release them to you.

Yes, it must be about 10 years old now. Lots have changed since then.

I am not sure exactly what your parents have done. You are using the word 'gift' but maybe your parents expect the money back – in that case it is really a loan.

You really should see a lawyer, especially with the large sum of money involved.

You will need to consider many issues such as:
– getting a written loan agreement drawn up
– lodging mortgages
– doing an updated will
– family law issues
– tax consequences
etc

If you don't get proper advice then who knows what could happen. Imagine if you moved in with someone or you died in an accident or went bankrupt. Interest on $800,000 would be about $50,000 per year – imagine if this was not deductible?

You need to do things properly to protect your parents.

I am located in Sydney.

Thanks novus

I am in Sydney, but reluctant to take on new clients at the moment.

Thanks Kong and Jonesy. Jonesy – do you need a broker or a financial planner? I can point you to either in Parramatta – probably best if you PM me please.

Yes, the money loaned is still the personal asset of the lender so, like all other personal assets, it will be at risk. A way around this is to gift it – but any gift is subject to the claw back provisions in the Bankruptcy Act. Another way is for the trust to earn some money, somehow, but probably the best way is for the trust to borrow as much as possible.

The Richstar matter is not an ASIC ruling but a court case by ASIC v Richstar. There are several matters between ASIC and Richstar, but the one you are probably referring to is Richstar Enterprises Pty Ltd v Carey (No.6) [2006] FCA 814) see http://www.austlii.edu.au/au/cases/cth/federal_ct/2006/814.html. This is the one where ASIC claimed that the trust was the alter ego of the person behind it. This is the only case where this has happened, to my knowledge and it is not the average type of case that would apply to most people. It concerns Corporations Act offences rather than bankrupcty for starters.

Since Richstar there have been a number of cases where the sole person behind a  trust was deemed not to be the true owners of the trust assets. One case in the NSW Supreme Court invovled a doctor who had her house held in a trust with her as sole director of the trustee and main beneficiary. She, mistakenly, left her house in the will to someone (even though it was a trust asset). The person who would have received it according to the will didn't get it as it stayed in the trust and so she sued the estate using the Richstar argument saying the doctor was the alter ego of the trust and therefore the house was the doctors. She lost. It was held that the trust assets were separate to the person's.  see Public Trustee v Smith [2008] NSWSC 397 at http://www.lawlink.nsw.gov.au/scjudgments%5C2008nswsc.nsf/2008nswsc.nsf/WebView2/4DE829E369881E6FCA25743B0017D5DA?OpenDocument

See also Kawasaki (Australia) Pty Ltd v ARC Strang Pty Ltd [2008] FCA 461 where it was held that  under a discretionary trust, no beneficiary under it has a vested interest.

Another one after Richstar, also involving ASIC is ASIC v Burnard [2007] NSWSC 1217. Here ASIC used the Richstar argument and lost. ASIC sought injunction restraining dealing with trust assets. Richstar was not followed, trust assets not property of Mr Burnard. http://www.lawlink.nsw.gov.au/scjudgments/2007nswsc.nsf/aef73009028d6777ca25673900081e8d/15560b0a474a6832ca2573830018e17e?OpenDocument

Now for the questions "Whats the benefit of a Trust against and Individual or Company buying property?"

There are a few benefits with Discretionary trusts. 2 main ones:

1. Trust assets are not your personal assets so if you are sued and go bankrupt the trust assets are, usually, not available to satify the debt. Shares of a company are assets is held in your own name. A property held by your company could come under the control of your creditors if you went down.

2. Tax flexibility. If you own a property you must receive all the income. there is not much flexibility. If your company owns property then it gets the income and any profit will need to be given to the shareholders in percentage to their ownership. With a discretionary trust the income can be given to the lowest taxed beneficiary first and this can save lots of tax.

on the question "What's more beneficial to have a Company as a Trustee or an Individual as a Trustee?"

A company is more beneficial for a few reasons:

1) trusts can get sued. If a trust gets sued it is actually the trustee of the trust that is sued. The trustee is then usually indemnified out of the trust assets, but if these are not enough then their personal assets are at risk. If the trustee was a $2 company with no assets then there is less risk to your own personal assets

2) flexibility in terms of changing trustees. Imagine you buy a property in your own name as trustee for the X trust. You hold the property for your family on trust. You want to hand over control to your son. If you are trustee that means you are the legal owner and your name is on title. If the son wants to mortgage the property or sell it etc you will have to do it as you are trustee. Now imagine if you had a company as trustee and you as director. Everythign would be in the name of the company. So to hand over control you just resign as director and replace yourself with your son. No title deeds need to be changed.

3. Flexibility in terms of finance. Imagine you own a proeprty as trustee for the X trust. You then have a dispute with a builder over the installation of a kitchen. It goes to court and you lose. You now have a judgment against your name. It will be much harder to get finance and you may be stuck with all that equity which cannot be used.

If you had a company as trustee, you just resign as director and appoint the son (assuming he is over 18). You no longer have to go on the loan documents or give guarantees (if trust is set up well). The son takes this role and the trust is able to increase the loan and access the equity (to pay the builder maybe!).

property held on trust for someone else is exempt property under the Bankruptcy Act, s 116(2) I think. So if you have opened a bank account with money in it for your kids and you go bankrupt, this money is not available to your bankruptcy trustee.

Same applies to real property.

But, where people can get into trouble is with lending or gifting to a trust. If you lend $100 to someone then that money is still yours. If you go bankrupt that money is still owed to you and will fall into the hands of the bankruptcy trustee who will then share it out to your creditors (or more likely keep it all for himself in fees!).

Gifting is also dangerous because if a person goes bankrupt gifts can be clawed back. I think the period is up to 5 years if there was no intention to defeat creditors or indefinetly if there was intention.

Planning is essential

every year.

You could always distribute to a company which would pay tax at 30%. From there it could be diverted to an individual later on with franking credits.