Change of Trustee Deed (Discretionary Trust)

This Change of Trustee Deed is a document that you can use to change the trustees of a trust when one of the trustees is retiring.

The document is to be executed as a deed by the retiring trustee, the new trustee and the appointor.

You MUST seek advice from a qualified professional before using this deed to check that it meets your specific circumstances.

Note: this document assumes that:

1. the outgoing trustee is voluntarily retiring, and has given notice to the appointor of its intention to retire; and
2. the outgoing trustee was appointed as the original trustee by the trust deed.

Will the retiring trustee maintain their indemnity?

While the outgoing trustee has possession of the trust property it may have a lien to secure its indemnity. Once it transfers the trust property that lien will be lost. If it has incurred liabilities on behalf of the trust and wishes to secure its indemnity it should consider what is necessary to protect its position under applicable laws including the Personal Property Securities Act 2009 (Cth).

Can a beneficiary become trustee?

It is not recommended. Trust deeds normally prohibit trustees being a beneficiary, even in another capacity. Apart from the deed requirements there are very serious stamp duty and capital gains tax issues of having the trustee as a beneficiary (even in a different capacity). If the Trustee is the sole beneficiary/unit holder, the trust may cease to exist as there may be no separation of legal and beneficial ownership.

Will this deed be effective in transferring title to the trust property?

In most cases the execution and registration of a deed in the suggested form will not transfer the legal title to the new trustee. For land, the applicable land titles office will also require a special form to be completed and lodged. Appropriate forms of transfer expressed to be pursuant to the deed are also needed for other property such as shares and bank accounts. For shares in a company, the requirements of the constitution of the company will need to be satisfied to register a transfer. For choses in action, the outgoing trustee should also give notice of the transfer to the new trustee to the debtor or other party.

It is important to have regard to the statutory requirements in the various states with regard to the stamping of a transfer of property of the trust to a new trustee arising from a deed of appointment of a new trustee.

In New South Wales, see section 54 of the Duties Act 1997 and stamp duty ruling DUT 37. In New South Wales, failure to comply with DUT 37 could result in ad valorem duty being imposed on the value of the trust assets transferred by the retiring trustee to the new trustee. Stamping and registration may require proof that the outgoing trustee held the property in its capacity as trustee of the particular trust.

Use this Change of Trustee Deed if:

• A discretionary trust has previously been established;
• A trustee is voluntarily retiring; and
• Another trustee is taking their place.

What does the Change of Trustee Deed cover?

• The changes to the trust deed; and
• Relevant consents and other consequential terms.