A family discretionary trust is one of the most effective structures for protecting assets, managing wealth, and preserving intergenerational control. But like any legal instrument, it’s not a “set and forget” arrangement. Over time, a trust that isn’t reviewed can quietly fall out of step with current tax laws, compliance requirements, and your family’s evolving needs.

At Perspective Law, we regularly review trust deeds that were established 10, 20—even 30—years ago. While the trust itself may still serve a purpose, the deed that governs it often no longer reflects modern legislation, evolving family dynamics, or best practice.

A review doesn’t always mean major changes—but it can prevent costly problems down the track. Without periodic checks, even well-structured trusts can drift from their original intent, leading to uncertainty, inefficiencies, or disputes among beneficiaries.

Whether your trust owns property, operates a business, or simply holds investments for the future, the best time to review your deed is before issues arise—not after.

Who Really Controls the Trust?
Many people assume the trustee holds the most power—but in most trust deeds, it’s the appointor who holds ultimate authority. The appointor can hire or remove the trustee and therefore controls who manages the trust’s assets.

If your deed doesn’t clearly outline who will take over as appointor—or restricts your ability to update this provision—you may unintentionally create risk. Disputes often arise when family members expect to inherit control, only to discover the deed says otherwise.

Similarly, many deeds don’t clearly cover what happens if a trustee resigns, passes away, or becomes unwilling to act. If there’s no clear replacement process, control of the trust could shift in ways that don’t reflect your intentions.

Does Your Deed Give the Trustee the Powers They Need?
A modern trust deed should allow your trustee to act with flexibility and foresight.

Common limitations we see in older deeds include:
• No power to amend key clauses
• Restrictions on capital distributions or early vesting
• Unclear rules around investing or borrowing
• No ability to appoint attorneys or grant securities
• Limited alignment with appointor succession

These limitations can create roadblocks when trying to adapt the trust to meet current family or business needs.

Trustees should also have practical powers to:
• Vary the deed
• Distribute income and capital strategically
• Appoint attorneys
• Manage early capital distributions
• Add or remove beneficiaries (where permitted)
• Handle loans, guarantees, and finance arrangements

If your trustee lacks these powers, it could impair the trust’s effectiveness or create unintended tax consequences.

Can You Add or Remove Beneficiaries?
Your deed should clearly state whether beneficiaries can be added or removed, and who has the authority to do so. If changes are made incorrectly, the trust may be treated as having started over (a “resettlement”), potentially triggering capital gains tax, stamp duty, and other tax consequences.

Even when changes are permitted, the trustee must always act in the best interests of the existing beneficiaries. The broader the class of potential beneficiaries, the more carefully this power needs to be exercised.

We help clients review these powers carefully—especially in cases where the family discretionary trust was originally set up for one purpose, but the family’s needs have since evolved.

Is the Trust Still Tax Efficient?
Tax laws change frequently. Structuring income distributions to specific beneficiaries—such as allocating capital gains or franked dividends to those best placed to receive them—along with managing UPEs (Unpaid Present Entitlements) and Division 7A loans (relating to private company loans to shareholders or their associates), are all impacted by evolving tax legislation.

A trust that was once tax-effective may now expose you to unexpected liabilities. Regular reviews help ensure compliance while preserving flexibility.

When Does Your Trust Vest?

Every trust has a life span—commonly referred to as the perpetuity period—which limits how long the trust can operate before its assets must be distributed. Until recently, most trusts in Queensland were limited to 80 years under the Perpetuities Act 1984 (Qld).

 However, with the commencement of the Property Law Act 2023 (Qld) on 16 July 2025, the maximum perpetuity period has now increased to 125 years for trusts governed by Queensland law.

This means that:
• Trusts created or amended after this date can generally adopt the longer 125-year limit
• Existing trusts may also benefit from the extended duration, depending on their terms and jurisdiction clause

Some South Australian-governed trusts may not have any perpetuity limits at all, but this depends on the deed’s governing law and where the assets are located.

Understanding your trust’s vesting date and planning for it early can help avoid last-minute decisions, tax complications, or forced distributions.

Is It Possible to Distribute Trust Property Fairly During Your Lifetime?
Many families wish to gift specific assets—such as a property or business interest—to a particular child or beneficiary. Doing this through a trust requires careful consideration of the trust deed, tax implications, and any available stamp duty exemptions.

In some cases, a fair and compliant outcome can be achieved by adjusting entitlements or offsetting future distributions to other beneficiaries. We can help you assess your options, ensure the trust allows for the transfer, and guide you through the process to preserve both legal compliance and family harmony.

Should You Restrict the Beneficiary Class?
In some situations—such as intergenerational land transfers or trusts holding property in NSW, Victoria or Queensland—it may be beneficial to limit the class of beneficiaries or exclude foreign persons.

In Queensland, trusts that include foreign beneficiaries may be subject to the Additional Foreign Acquirer Duty (AFAD), a 7% surcharge on certain property transactions under the Duties Act 2001 (Qld). Land tax surcharges may also apply.

Your deed should be tailored to reflect the trust’s purpose, the location of its assets, and future estate planning strategies.

Ensure Your Trust Remains Fit for Purpose
A family discretionary trust can be a powerful tool for wealth protection and succession—when properly maintained. But when left unchecked, it can become a liability, triggering disputes, tax liabilities, or unintended transfers of control.

At Perspective Law, we help families, trustees and business owners review, update and future-proof their trusts. We take a strategic approach to ensure your trust structure continues to support your broader estate, business and succession planning goals.

Contact us today or phone us on 07 3839 7555 to arrange a review of your trust deed and ensure your structure remains aligned with your vision.

Further information

Wills, Estates and Tax in Queensland: What You Need to Know

Securing Your Legacy – How to Protect your Family Trust

Estate Planning for Vulnerable Beneficiaries -Practical Strategies for Long-term Security