A trust is an arrangement where a person, family or organisation can hold money or property on behalf of another person.
The person, family or organisation holding the money or property is known as the trustee. The person they are holding the money or property for is known as the beneficiary.
Setting up a trust
Trusts are often set up for:
- people such as a child or infirm person
- businesses when there is more than one family member involved in the operations
- a charity.
You can set up a trust with either:
- an accountant
- or a solicitor.
You should contact a solicitor or accountant if you want to find out:
- how to set up a trust
- what a trust binds you to
- the tax rules about a trust
- if a trust is right for your business.
Accountants and solicitors who set up and operate trusts in the Northern Territory are subject to the Trustee Act.
Responsibilities of a trustee
All trustees are responsible for any funds spent from the trust.
By law, the assets can only be spent in the best interests of the beneficiary.
Where a trust has been set up for a child or person
Although a parent, guardian or close family member may recommend spending funds from the trust, it’s still the trustee’s decision and responsibility.
The trustee may have to prove to a court that the payment was in the best interests of the beneficiary.
What advice a trustee should take from a guardian
A legal guardian is generally appointed by a court or in the case of a child they are nominated in a will.
The guardian is responsible for lifestyle decisions including:
- where a person should live
- whether a person should undergo a medical procedure
- where a child should be educated and other everyday matters.
What advice a trustee should take from a parent or family member
If the child or person doesn’t have a legal guardian, the trustee will consult with parents and/or family members, when making decisions about spending funds, investments and other matters relating to the beneficiary’s interests.
Documents you need to provide a trustee for reimbursement
All trustees normally require certain documents in order to reimburse a client or family member from a trust.
These documents are called evidence of expenditure.
The documents can be in the form of:
- loan documents.
A trustee cannot accept the word of a client or family member that they spent money on the beneficiary.
A trustee has a responsibility to account to auditors and to fully document each decision, in case the decision is challenged in a court.
Role of the Public Trustee
The Public Trustee administers many types of trusts in the NT.
Go to about the Public Trustee to find contact details.
These include money awarded through all of the following:
- workers compensation
- motor vehicle accidents for incapacitated persons
- trusts created by a will
- trusts created by trust deeds
- court orders including the management of the legal and financial affairs of an adult who has impaired decision-making capacity.
The Public Trustee can manage trust accounts.
This includes all of the following:
- collecting income such as pension entitlements, superannuation, rents, investments, dividends from shares and interest
- lodging social security and medical benefits forms
- arranging payment of accounts such as accommodation, personal expenses, rates, property repairs, gas, electricity, medical, hospital and nursing home charges
- preparing and lodging taxation returns
- maintaining accurate accounts and providing statements to guardians on an annual basis or more regularly if required.
Last updated: 01 August 2018