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What is a Trust?
A trust is a structure or form of relationship where property is held by one party for the benefit of another. For a trust to exist there needs to be the following:
- A trustee to administer the trust;
- Trust property which is to be held and distributed;
- A beneficiary to receive the property or have it held on their behalf.
In a trust relationship, the two parties are a trustee and a beneficiary. A trustee is tasked with ensuring the trust is managed legitimately and effectively and a beneficiary is the recipient of the property. Although the trustee legally owns the trust property, the beneficiaries have what is known as an ‘equitable interest’. This means that even if the beneficiaries are not legally entitled to the property, the trustee still has to act in accordance with the arrangements set out in the trust deed.
Fiduciary relationship
A trustee and beneficiary have what is called a ‘fiduciary relationship’. A fiduciary relationship exists when the relationship involves:
- Trust and confidence placed in one person;
- An undertaking by that person to act on behalf of another.
Another example of a fiduciary relationship is the solicitor/client relationship. In this sense, a client provides a solicitor with confidential information and the solicitor acts on their behalf.
Trusts come in a multitude of different forms including:
- A discretionary trust
- A unit trust
- A fixed trust
- Bare trusts
- Hybrid trusts
- Testamentary trusts
- Charitable trusts
- Superannuation trust
What is a Trust Deed?
A Trust Deed is the document which governs the trust. A trust deed should outline who the trustee is and all the beneficiaries, arrangements for distribution of the trust property and instructions for how the terms of the trust deed can be varied.
What is a Trust Lawyer?
Trust lawyers are experts in setting up trusts for clients. The process of creating a trust will include defining the trustee and the beneficiaries and will be effectively implemented through a trust deed.
Generally, a trust lawyer can help set up a trust and create a trust deed. A trust lawyer will also give effective legal advice to the trustee regarding its management. In many cases, a lawyer may act as the trustee of trust property and can therefore be an effective tool in its management particularly as this is a difficult area of the law and there are many obligations placed on trustees.
Why do I need a Trust Lawyer?
Trust law is extremely complex. If you are looking to set up a trust you will need to talk to a lawyer. A trust lawyer will be able to set up and create the appropriate documentation for the trust. A main reason people want to set up a trust is to benefit from specific tax implications, a trust lawyer will be able to explain the benefits of setting up a trust for this reason. Besides this, there are many other reasons to set up a trust, an example is to hand over an estate through an inheritance. For this reason, it is best to engage with a lawyer to explain the possible benefits from the many types of trusts.
What will a Trust Lawyer provide?
Lawyers experienced in trust law will provide you with expert advice with the goal that your interests and rights are protected. They are able to provide their services to those wanting to establish a trust and both the the trustees and beneficiaries in a trust.
How will I know if I need a Trust lawyer?
Due to the complicated nature of trusts, it’s important to retain a lawyer if you’re wanting to create a trust. You will also need a trust lawyer if you want to review anything within the Trust Deed or make any changes to it. If you have questions around the way trust property is being distributed, it’s also wise to consult a lawyer before taking any action.
Where do I find the law on Trusts?
Trust law comes from the common law and is largely based on legal principle and legal precedent. In contrast to other areas, such as criminal law, trust law is governed by judicial determinations rather than legislation.
How much will a Trust Lawyer charge?
Hourly rates and Court fees
Fees charged by a trust lawyer can be on a fixed-fee and hourly basis. If your legal issue related to a trust dispute or a claim for equitable damages, then it is more likely that a lawyer will charge on an hourly basis. Hourly rates differ amongst lawyers, but there are lawyers who provide their fees ‘on-spec’ or on a ‘no win no fee’ basis. This can be an attractive alternative if you want piece of mind at the conclusion of your matter.
What can a lawyer legally charge?
Costs can rise very quickly in litigation. However, this is sometimes hard to avoid when work is being done by a lawyer on an hourly basis. Where fixed-fees are not offered by the lawyer, you should expect to be invoiced on a monthly basis. Lawyers are required to adhere to the rules outlined in the relevant acts. For example, in NSW and Victoria, this is the Legal Profession Uniform Law 2014.
Lawyers are required to provide to their clients a document called a ‘costs disclosure’ if your costs will be higher than $750.00. This document will outline how costs will be calculated in relation to your case. Also be mindful that costs are divided into ‘professional costs’ and ‘disbursements’, and you will be expected to pay for both. Professional costs are the costs of the actual work done by the lawyer, whilst disbursements cover incidentals such as court filing fees, telephone calls, photocopying charges – amongst other things.
What if I don’t agree with the costs?
You have the right to request an itemised bill that will outline how much time was spent on each task in relation to your matter, and how this adds up to the fee you’re requested to pay. If you wish to dispute the cost, you can make a complaint to the The Office of the Legal Services Commissioner (OLSC) and they will investigate the matter and may allocate a costs assessor. You can also take further legal action in the Courts if you feel you have been unfairly charged.
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