Are you looking to save and protect money for a specific purpose or individual? A trust account may be the answer. Trust accounts can help safeguard financials, provide detailed documentation of all monetary transactions, and assist in meeting personal or business objectives. If you’re based in Australia and want to open a trust account, this guide will be your go-to source for information on setting up your own.
In this article, we’ll provide an overview of how a trust works and step-by-step instructions on how to set one up online and offline in Australia. So, whether you’re creating an education foundation for future generations or protecting assets from unexpected expenses, keep reading to start opening a trust account today.
What is a trust account?
A trust account is a legal arrangement in which funds are held for the benefit of another person. The trustee is responsible for managing and maintaining the assets or resources contained within the trust. The support can include real estate, bank accounts, and investments but may vary depending on the purpose of the trust account. Generally, any income these assets generate is directed back into the trust to be managed according to legal instructions.
Depending on the unique requirements of each case, more than one trustee may be appointed to handle a trust account. Each appointed trustee must follow strict fiduciary duty regulations when managing funds in a trust account.
What type of trust account do I need?
The type of trust account you open will depend on your particular requirements. Generally, there are three types of trusts which you can open in Australia. These are:
Fixed trust: A fixed trust is established for a specific purpose or beneficiary and will have an end date when the assets are distributed to the beneficiaries.
Unit trust: A unit trust is created when multiple beneficiaries are involved and can have an open or closed duration.
Discretionary trust: This type allows the trustee to decide how funds are distributed amongst the various beneficiaries.
It’s important to consider all aspects of your circumstances before deciding which type of trust suits your needs.
How to open a trust account in Australia: Online vs. Offline
If you’re based in Australia and looking to open a trust account, the first step is to decide how you would like to open it. You can open a trust account either online or offline.
Online
To open a trust account online, you will need access to a computer with an internet connection and be able to provide personal details such as your full name and address. You must also provide copies of documents that prove your identities, such as a passport or driver’s license. Once you have completed the online form, you must read and agree to the trust deed before submitting it for approval.
Offline
Alternatively, you prefer to open your trust account offline. In that case, you must make an appointment with a lawyer or financial planner who can advise and assist in setting up the trust. You must provide documents and personal information as mentioned above and ensure that all parties involved in the faith are present at the meeting. Once you have agreed on the terms of the faith and the deed has been signed, you must ensure that the trust is registered with the relevant authorities.
What documents do I need to open a trust account?
Once you have decided which type of trust account is most suitable for your requirements, the next step will be gathering all the necessary documents. These documents must meet all legal needs for the trust to be registered with the Australian Securities and Investments Commission (ASIC).
The essential documents needed are:
- A trust deed
- Appropriate identification documents for all parties involved in the trust
- Proof of address for all involved parties
- Trustee declaration form
- Bank statements
- Investment information (if applying to invest funds)
Final Steps: Setting up a trustee and managing your trust
Once you have gathered all the necessary documents, you must set up a trustee. The trustee is responsible for managing the account and must ensure that all funds are allocated following the terms of the trust deed.
You should also ensure that all parties in the trust understand their roles and responsibilities as set out in the trust deed. As the trustee, you must also ensure that all fiduciary duties are complied with and that any investments follow applicable laws and regulations.
You should keep detailed records of all transactions, ensuring greater transparency and accountability. Finally, it’s essential to review your trust account regularly to ensure that it still meets your needs and that all the terms of the trust deed are being adhered to.
Conclusion
Now you know how to open a trust account in Australia; you can be confident that any investments are secure and compliant with the relevant regulatory bodies. You can also rest assured knowing that you have taken the necessary steps to protect your investments and assets for the future.
