A trust account is a particular bank account used to hold money or other assets for someone else. Trust accounts are commonly used in Australia to manage the financial affairs of a business, estate, or family. There are several ways to open a trust account in Australia, and this article will outline the most common methods.
What is a trust account, and what are the benefits of having one?
A trust account is a particular bank account opened in the name of another person, such as an attorney or executor of a will. The money or assets held in the trust are legally owned by the beneficiary and managed by the trustee. Trust accounts can offer numerous benefits to those who used them, including protection from creditors and enhanced privacy.
How do you open a trust account in Australia?
The first step in opening a trust account is understanding the legal requirements of establishing and managing a trust. Once you’ve familiarised yourself with the rules, there are generally six ways to create a trust account in Australia:
- Appointing a trustee: The most common way to set up a trust is by appointing a professional trustee. A professional trustee is an expert in the field of trusts, and they can help you through the process, from selecting the correct type of trust to setting up the relevant paperwork.
- Setting up with a bank: You can also approach your local bank or financial institution and open a trust account with them. This process will require you to fill out a trust application, provide identification documents and possibly make an initial deposit.
- Online trust services: Several online trust services available these days allow you to set up a trust account quickly and easily. These services typically offer automated processes for setting up and managing trusts and providing guidance and support for trustees.
- Appointing a lawyer: You can also establish a trust by consulting with a lawyer or solicitor specialising in trusts. A lawyer will help you through the process, from understanding the legal requirements to completing all necessary paperwork.
- Working with an accountant: Accountants can also help set up a trust. They can advise on legal requirements, help you select the correct type of trust for your needs, and guide you through establishing the trust.
- Using an independent trustee service: Finally, if you don’t have access to professional trustees or lawyers, you can use an independent trustee service. This service allows individuals to appoint a third party as the trustee for their trust account, ensuring that all legal and financial requirements are met.
What can you use a trust account for?
Once you have set up a trust account, there are numerous uses. Most commonly, trusts are used to manage the financial affairs of a business, estate or family. For example, they can help with tax planning by allowing assets to be moved into the account and managed more efficiently. Trusts can also provide excellent protection for assets from creditors and other legal claims, making them an ideal choice for individuals who want to protect their wealth.
How to manage your trust account
Once you have opened a trust account, it is vital to manage it properly. It includes filing periodic tax returns and ensuring that all funds are used for their intended purpose. It’s also essential to make sure that trustees are aware of their duties and responsibilities and any legal environment changes that might affect their ability to manage the trust.
Things to keep in mind when setting up a trust account
When setting up a trust account, it’s important to remember a few key things:
- Ensure that you are aware of all the legal requirements and obligations associated with trusts and that these are met.
- Ensure that trustees understand their duties and responsibilities relating to the trust.
- Select the correct type of trust for your needs and choose professional trustees or services who can guide you through the process.
In conclusion
Setting up a trust account in Australia is straightforward, provided you understand the legal requirements. By following some simple steps and engaging expert advice where needed, you can easily set up a trust account that meets your specific financial goals.
