Why change the name of the Family Trust?

QUESTION: If the Family Trust name doesn’t do anything why change it? It is not registered anywhere. It is just a nickname to help the Accountant, who may look after 100s of other Family Trusts, identify mine quicker. Why change the Family Trust Name?

ANSWER: Fiveteen reasons to update the name of a Family Trust

There are some reasons to update or change your Family Trust Name:

1. correct spelling errors (e.g. Smitth Family Trust)
2. husband has died (e.g. Coral & Ted Smith Family Trust)
3. wife has divorced you (e.g. Joanne and John Lee Family Trust)
4. your family name is distinctive and for privacy, you want it removed from your family trust (e.g. Barlowe Family Trust)
5. name is not as clever as you first thought (e.g. Scrooge McDuck Family Trust)
6. name may upset the ATO (e.g. Get out of Tax Family Trust)
7. the name of the trust scares banks (e.g. the 38 Warren Street Development Trust, suggests that you are a property developer)
8. your parents died
9. you may NOT want it to be so obvious that the Family Trust is also a ‘Service Trust‘ for your main business (e.g. Williams Service Trust)
10. the Family Trust name is too long (long Family Trust names do not fit on bank mortgage statements, ATO and ASIC forms)
11. the Family Trust name identified its purpose but that purpose has changed (e.g. Ramsay Road Clear Mountain Trust)
12. the Family Trust name has symbols in it, and banks, ASIC and the ATO forms cannot cope (e.g.  ‘The Regus’ 27/34, 42 – 48 George Street, NSW – Holding Trust)
13. you have been numbering your trusts, e.g. Smith Family Trust No. 2; Smith Family Trust No. 4. The banks and the ATO now want to see all the other trusts as well
14. your trust name contains words that are illegal or suggest that you hold a licence or are related to other businesses (e.g. Bank, Building Society, BHP, Incorporated, Royal, Commonwealth)
15. your accountant is sick and tired of so many trusts in his filing cabinet having the same name. E.g. Rossi Family Trust

Does the new name of my Discretionary Family Trust have to be unique?

A trust name is similar to the name of a human being. Just as many people have the same name, so too, many trusts have the same name. E.g. Jones Family Trust.

Your Family Trust does not need a unique name. Family Trust (Discretionary trusts) like unit trust names are not registered with a governing body. In contrast, company names are registered with ASIC. 

To overcome this problem the government stamps every human and every Family Trust with a number. For example, a human may have a Tax File Number. A Family Trust may have a unique Australian Business Number (ABN) identifier.

Any taxation or CGT issues when you change the name of your Family Trust?

There are generally no taxation issues when you update the Family Trust name. With every document, you build on our website you get a letter on our law firm’s letterhead. The letter confirms there are generally no taxation issues when you correct the Family Trust name.

Resettlement of the Family Trust – when you change the Family Trust name?

A Family Trust is a relationship. The trustee holds property on trust for the benefit of the beneficiaries.

A Family Trust deed sets out the terms of the trust. This includes the duties of the trustee in holding the trust property.

There are many reasons why the Appointor instructs the Trustee to amend the Family Trust Deed. The difficulty arises in deciding what kind of amendments can be made to a trust deed without causing a resettlement. In other words, when do amendments to a Family Trust deed cause a new trust to be created?

A Deed of Variation of the Family Trust to only change the trust name does not usually trigger a resettlement.

Any stamp duty when I update the name of my Family Trust?

Your local stamp duty office may require that the Deed of Variation of Change the Family Trust Name (and all copies) be lodged after signing. However:

• there is no need to get the Legal Consolidated Change of Family Trust Deed stamped in Western Australia, Queensland, South Australia and the Australian Capital Territory; but
• in all other States and Territories, Deeds of Variation must be lodged for stamping, and nominal lodging fees apply.

If another law firm prepared your Deed of Update for the Family Trust Name, then check with that law firm. Each law firm drafts the legal document differently.

Let the ATO know that I have changed the name of the Family Trust?

When you update the name of your Family Trust your accountant will let the ATO know.

The trust name should be consistent from year to year, except in the year of a name change when you lodge your trust accounts. 

Let everyone know that the Family Trust name has changed

Whoever the Family Trust is dealing with should also be advised of the change of the name of your Family Trust. This includes people doing business with the Family Trust. E.g. Banks, creditors etc…

When you distribute income to a beneficiary then that beneficiary should also be told of the change of name.

Can I change the name of the Family Trust via a minute or resolution?

That would be silly. A Family Trust is a Deed. A deed can only be changed by another Deed. Press the “Start for Free” button above and start building the Family Trust Deed to Change a Family Trust name. This Deed is a formal recording of the decision to change the Family Trust Name and also changes the name.

Keep your original Discretionary Trust Deeds and all variations

We make special mention of the Minute that is included in the Family Trust Change Name Kit. You need to hold and retain, forever, original deeds. If you do not retain original signed deeds, you will not be able to open bank accounts or borrow money. Copies are not good enough. Even certified copies of Family Trust deeds and variations are not good enough.

You need to show the bank all original trust deeds.

Ensure that both you and your accountant retain original deeds. They are precious and usually impossible to replace.

To labour the point, if your Family Trust Deed has been updated 8 times, over the last 30 years, then you need to give the bank 9 ORIGINAL Family Trust deeds. If you are unable to decide if a deed is original lick your finger and rub it over a signature. Please do not get involved in the silliness of electronic signatures.

Telephone us. We can help you answer the questions to correct or change the Family Trust name.