What is a Family Trust?

A Trust may be characterized in various ways and is frequently regarded as an instrument or mechanism for protection. One may find it beneficial to conceptualize a Trust as an aircraft undertaking international travel. 

In this analogy, the Captain, co-pilot, and crew are entrusted with the responsibility of safeguarding the passengers and cargo. In this scenario, the Captain and crew represent the Trustees, the passengers denote the Beneficiaries, and the cargo can be perceived as the assets encompassed within the Trust.

A Family Trust transcends the notion of being merely a device or concept; it constitutes a complex web of relationships. The individual who establishes the Trust, referred to as the Settlor, maintains a relationship with those appointed to manage the Trust on their behalf, known as the Trustees. Furthermore, the Trustees themselves engage in a relationship primarily with the individuals for whom the Trust has been established, identified as the Beneficiaries.

The Settlor reposes faith in the Trustees to administer the Trust in accordance with the stipulations delineated in the trust deed, while the Beneficiaries place their trust in the Trustees to safeguard the Trust’s assets and act in their best interests. 

In legal terminology, it has frequently been asserted that a Trust comprises a set of equitable obligations, with the Trustees bound to oversee the property under their control for the benefit of the Beneficiaries.

The duration of these relationships is contingent upon several factors. Primarily, Trustees, in the ordinary course of their duties, bear an obligation to a Beneficiary only while they serve in their capacity as Trustee. 

Consequently, upon their retirement or resignation from this role, their obligations are terminated. Furthermore, these relationships will come to a conclusion upon the cessation of the Trust itself. The termination of the Trust typically occurs within a period of 125 years from its establishment, as legislation mandates that a Trust cannot exist beyond this duration. 

However, in certain circumstances, a Trust may be concluded prematurely by the Trustees through a process known as ‘early vesting,’ which entails advancing the date specified in the Trust deed. When such an event transpires, all associated relationships will likewise cease.