What Are Trusts? A Trust is a legal arrangement where a person or entity ( the Trustee ) holds and manages assets for the benefit of others (the Beneficiaries ). The Trustee is responsible for administering the Trust in accordance with its terms and in the best interests of the Beneficiaries. Trusts are commonly used for asset protection, estate planning, and business structuring in Australia. Key Parties in a Trust Settlor : the person who creates the Trust and contributes the initial assets. Trustee : the individual or company responsible for managing the Trust assets. Beneficiaries : the people or entities who benefit from the Trust. Appointor : the person who has the power to appoint or remove Trustees. How Can Trusts Benefit Individuals and Business Owners? Trusts offer a range of advantages for both personal and business purposes: 1. Asset Protection Trusts can help shield assets from creditors, lawsuits, or family disputes, as the assets are legally owned by the Trustee, not the individual. 2. Estate Planning and Succession Trusts allow for the smooth transfer of wealth to future generations, helping to provide for minor or vulnerable Beneficiaries. 3. Tax Planning Trusts can offer tax flexibility. Income generated by Trust assets can be distributed among Beneficiaries, potentially reducing the overall tax liability. 4. Business Structuring Trusts are often used by business owners to separate business assets from personal assets, manage risk, and facilitate succession planning. 5. Privacy Trust arrangements are generally private, unlike Wills which become public during probate. How Are Trusts Created in Australia? Establishing a Trust in Australia involves several key steps: 1. Decide on the Type of Trust Common types include: Discretionary Trust : Trustee decides how income/capital is distributed among Beneficiaries. Common for family Trusts. Unit Trust : Beneficiaries hold fixed units, similar to shareholders in a company. Often used for business or investment purposes. Testamentary Trust : created by a Will, comes into effect upon the Will-maker’s death. 2. Prepare a Trust Deed A Trust deed is a legal document that sets out the terms and conditions of the Trust, including the powers of the Trustee and the rights of the Beneficiaries. 3. Settle the Trust The Settlor provides the initial asset (often a nominal sum) to establish the Trust. 4. Appoint Trustees and Beneficiaries The Trust deed will name the Trustees and Beneficiaries. The Trustee must accept their role and responsibilities. 5. Stamp Duty and Registration In Western Australia, unlike some other Australian states, stamp duty is not payable on the mere execution of a Trust deed and it does not need to be stamped. Registration with the Australian Taxation Office (ATO) will be necessary if the Trust will have a Tax File Number or Australian Business Number. 6. Ongoing Compliance Trustees must comply with the terms of the Trust deed and relevant laws, including annual reporting and tax obligations. If you are considering establishing a Trust, Crabtree Legal can provide tailored advice to ensure your Trust is structured to meet your personal or business needs.

Understanding Family Provision Claims in Western Australia Family provision claims allow certain individuals to seek a greater share of a deceased person's estate if they believe they were not adequately provided for. In Western Australia, these claims are governed by the Family Provision Act 1972 (WA). This article addresses key aspects of eligibility, court considerations, and Will-drafting strategies to minimise disputes. 1. Eligibility to Make a Family Provision Claim in WA Under the Family Provision Act 1972 (WA), the following individuals may apply to the Supreme Court for a larger share of an estate: Spouses or de facto partners (current or former, if receiving maintenance from the deceased). Children , including those born within 10 months after death. Grandchildren who were either: Maintained by the deceased before death; or Living at the time of death with a parent who predeceased the deceased. Stepchildren who were maintained by the deceased or where the deceased received >$517,000 from the stepchild's parent's estate. Parents of the deceased. Claims must be filed within six months of the grant of probate or letters of administration, though extensions are rarely granted. 2. Factors Considered by the Court When assessing entitlement, the court evaluates: Financial and personal circumstances : The applicant’s age, education, earning capacity, and current resources. Relationship dynamics : The nature of the relationship between the applicant and deceased, including conduct toward each other. Estate composition : The value, type, and liquidity of estate assets. Comparative needs : The financial requirements of other beneficiaries and dependents. Contributions : Any contributions by the applicant to the deceased’s assets or welfare. Existing provisions : What (if any) provision was made for the applicant in the Will. The court does not assume equal distribution among children or automatically interfere with testamentary freedom. 3. Drafting Wills to Minimise Claim Risks To reduce the likelihood of successful claims, consider these strategies: Clarity and specificity : Draft a detailed Will that unambiguously outlines asset distribution, reflecting current circumstances and intentions. Ambiguous terms or outdated provisions increase dispute risks. Memorandum of wishes : Attach a non-binding document explaining exclusions or unequal distributions (e.g., estrangement, prior financial support). Proactive communication : Discuss your estate plans with potential claimants to manage expectations and reduce post-death surprises. Regular reviews : Update your will every 3–5 years or after major life events (e.g., marriage, divorce, new dependents). Caution with forfeiture clauses : While "no-contest" clauses (threatening inheritance loss for challengers) may deter claims, they are not legally binding in Western Australia for family provision claims. Key Takeaways Understanding eligibility criteria, court evaluation factors, and preventive Will-drafting techniques is essential for effective estate planning in Western Australia. Executors and beneficiaries should seek prompt legal advice when disputes arise, while Will-makers should prioritise clear documentation and open communication to mitigate risks. Professional legal guidance ensures compliance with the Family Provision Act 1972 (WA) and reduces the emotional and financial toll of litigation.