"Oils aint Oils" or Trust deeds aint Trust Deeds?

[PrimeCommercial]

In the process of setting up a new business together with an old work collegue.
We've had a chat to an accountant and a solicitor about the correct entity and have been advised the same thing pretty much.
Business to held in Unit Trust and two Discretionary Trusts set up each holding 50% of the units in the Unit Trust. The unit trust and discretionary trust all have corporate trustees. So we need three trusts and three companies set up.

The solicitor is quoting two and a half times more than the accountant and justifies this by how fantastic their trust deeds are. The accountant has said he gets all his trusts setup through a solicitor.

So my question is...Do trust deeds vary significantly from one solicitor to the next and of so does it matter?

To reduce the overall costs the solicitor suggested to have one corporate trustee for the unit Trust and then have an individual as the trustee for each of the discretionary trusts.

Appreciate any thoughts or experience you may have.

 

[Terry_w]

Solicitors don't draft their own deeds generally. They purchase deed templates from suppliers and then set them up similar to the accountant. Helping you decide who goes where. It would be too complicated to draft a deed as you need to be an expert in several areas of law, especially tax. I am a solicitor but would not draft my own deeds. It would work out cheaper to buy them anyway.

There is a big difference in deeds with some deeds from well known companies having problems. There are also several different types of unit trust too.

Since trusts are legal arrangements you really need legal advice regarding a number of issues, especially trustee duties and director duties. Legal advice is something a non lawyer cannot give. Solicitors can give tax advice too.

As for the trustee, you could have a person own the units of the unit trust as trustee for a discretionary trust but having a company as trustee makes things simpler in the sense of easier to pass control and clearly distinguishes ownership.

Legal advice is important. I have seen one person who lost control of the family trust because they didn't know what they were doing.

 

[Dazz]

The solicitor is quoting two and a half times more than the accountant and justifies this by....

Forget about that solicitor then.....they sound very wet behind the ears.

Any solicitor that charges only 2.5x what a qualified accountant charges to do the same job, obviously is a rubbish solicitor.

If the solicitor was any good, they'd be charging you at least 8 times the price of the accountant, and then surreptiously hire the accountant behind your back on bulk discount rates of 0.7x the accountant's normal charge to do the work anyways.

Your solicitor only charging 2.5x and doing the work themselves sounds like a right royal plonker. I'd be giving them a real wide berth.

 

[cu@thetop]

I tell clients to have their accountant set these things up. If I had to do it myself I would buy one from ACIS (no not ASIC).

 

[Rob G.]

Trust deeds are like cars.

You can buy cheap mass produced basic small ones and hope you never have a crash.

Or you could buy an expensive one fully optioned up with all-round airbags and crumple zones to minimise passenger injury.

They both look like a car and ostensibly perform the function of a car.

Your choice.

Cheers,

Rob

 

[Aaron_C]

With trust deeds you never knows there's a problem until there's a problem

 

[Ausprop]

and there may not even be a problem. Are you a nervous person Shady?

 

[PrimeCommercial]

Thanks for the thoughts peoples.

From investigating further into trusts it seems as though they are (or should be) regularly reviewed and updated as legislation changes.

and there may not even be a problem. Are you a nervous person Shady?

No, not nervous at all.