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The ultimate guide to opening a trust account in Australia

Trust accounts are a common form of financial protection used by Australians nationwide. A trust account holds funds on behalf of another party, such as an individual or business entity, and is managed by a trustee. In Australia, several requirements must be met to legally open and maintain a trust account. This article provides an overview of the steps necessary to open a trust account in Australia, with detailed instructions for each step. This guide will prepare you to make informed decisions about setting up your trust account.

Choose your trustee

The first step in opening a trust account is to choose your trustee. This person or entity will manage and oversee the funds held within the trust. Your trustee must be qualified and authorised by an approved financial institution or Australian legal body. They must also provide independent advice regarding investments made with the trust account funds and act following any requirements in the trust deed. Once you have chosen your trustee, it is vital to ensure they are registered and qualified before proceeding with other steps. The trustee will then be responsible for preparing and filing the trust deed.

Draft a trust deed

A trust deed is a legal document that outlines the purpose and conditions of the trust account. Both parties must sign it – you, as the settlor or grantor, and your trustee – before it can be registered with the relevant Australian authority. To ensure clarity, make sure that the trust deed clearly outlines the trust’s purpose, identifies the beneficiaries, specifies the trust’s duration, and defines the powers and duties of the trustees. Considerations regarding tax and investment should also be included, as well as a plan for resolving disputes. You should consult with an experienced lawyer to ensure your trust deed meets all legal requirements in Australia.

Register the trust deed

Once you have drafted a comprehensive trust deed for your account, register it with a relevant Australian authority, like the Supreme Court or Office of Regulatory Services. Depending on the state or territory in which you live, this may be done through the Australian Securities and Investment Commission (ASIC) or the relevant state government body. The registration process requires you to submit a copy of the trust deed and supplemental documents like an application form and supporting documents. Once the registration is complete, you will be issued an official registration certificate for your trust account. This document should be kept in a secure location for future reference. Registering a trust deed must include information about trustees, settlers, beneficiaries, and assets to be included in the trust.

Open your bank account

Once you have registered your trust deed with an appropriate Australian authority, you can open a bank account for your trust. When opening an account for your trust, it is crucial to ensure that all required documents are provided upfront and that any fees associated with setting up the account are paid. You will also need to provide a copy of your trust deed and necessary identification documents to prove that you are the legal settlor and trustee of the trust.

Deposit funds

The next step is to deposit funds into your new trust account. Ensuring that all funds deposited in this account belong exclusively to the trust, not yourself or any other person or entity, is vital as a trustee. Any investments made from this money must be approved by both parties involved in setting up the trust; you as the settlor and your trustee as the account manager. It is crucial to properly document and record any transactions made with the funds for tax and investment purposes. You can use the funds you deposit to invest in various markets, such as stocks and bonds, or to fund any other purpose outlined in the trust deed. You can check the Saxo Markets to see which would suit your investment best.

Investing and managing the trust

Investing and managing the trust assets is the final step in opening a trust account. Your trustee will ensure that all investments adhere to the conditions outlined in your trust deed, that taxes are paid on time, and that any returns are recorded correctly. The trustee must also monitor and report on the progress of investments regularly to ensure that all parties involved remain informed. Trustees must also continually assess whether any changes need to be made to ensure ongoing compliance with legal requirements or other matters relating to the trust’s management to ensure that the trust remains protected and operational.

In conclusion

Setting up a trust account in Australia can be complex and time-consuming, but it is essential to protecting your financial assets. Choose your trustee carefully to ensure they are qualified and authorised by the relevant financial institution or Australian legal body. Then draft a comprehensive trust deed outlining the purpose and conditions of the trust account, register it with the relevant authority, open a bank account for your trust, deposit funds into the account according to any requirements outlined in the trust deed, and manage all investments from this money. With these steps and guides, you can rest assured that your assets will remain secure in an Australian trust account.

Leighton Jon
the authorLeighton Jon