We encourage many of our growing small businesses to set up family discretionary trusts. ?
These trusts are great for one family and have a number of people involved in them.
✅ Firstly, the person who starts a family trust is the settlor.
The settlor sets up the trust by contributing about $10 or $20, merely to kick it off.
And then… the settlor sails off into the sunset never to be known of again. ?
That settlor can’t be a family member. We don’t really want it to be the accountant or the lawyer either. It should be a next-door neighbour or someone known to the family.
All they do is start the trust. That’s it.
✅ Next is the trustee. This is the person who directs the trust and makes all the day-to-day decisions.
They have power to run that trust. The trustee can be an individual, or they can be the director of a trustee company.
✅ Then you have the all-powerful appointor.
The appointor is super important in a trust because they can sack the trustee and put another trustee in place, if ever needed.
✅ Finally, you have the beneficiaries of that family trust.
In Australia, beneficiaries under 18 can earn about $416 tax-free.
Beneficiaries over 18 pay individual tax rates.
Companies pay company rates.