Costs for establishing a Family Trust

[DavidA]

Hi everyone,

I'm in the process of looking into the establishment of a family trust structure for my pending new business start-up & have been quoted by my accountant & tax advisor, a fee of $2,500 to do this.

They are a reputable company and I am comfortable in dealing with them in other matters we have had to date, but $2,500 seems high for this type of establishment.

I'm not looking to find the cheapest price on the market to get this done quickly, as I am wanting to get this set-up securely and protect personal assests as best we can, but has anyone else to this forum established family trusts for their business and if so, would you mind advising the costs you paid to get it done ?

Many thanks,
David.

[FletcherTax]

David,

Registering the Trust Deed with the OSR costs - $500.

Deed itself - anywhere from $300 (generic online version) to $1500 (drawn up by a solicitor)

Accountant costs for organising solicitor and registering Trust Deed - Usually upto 2 hours of work.

Trustee Company (if applicable) set up with ASIC - $400

Accountant costs for organising trustee company and set up with ASIC - Usually upto 2 hours of work.

Please note accountants costs and times vary depending on your particular set of circumstances. Some accountants outsource company and trust formations altogether.

Hope that's of some help,

[DavidA]

Thanks for that - it's good to hear another opinion to my original quote.

Greatly appreciate the reply & your comments.

Cheers.

[JamesMillar]

We use www.cleardocs.com for all vanilla entities and supplement with shareholders / stakeholders agreements (legal) if required. It takes no more than one hour to start all of these online and maybe another one hour for ABN, GST, TFN registration.

We use to operate like other firms and charge around $1500 for these without ABN, TFN rego (and we used a law firm to incorporate) but we much rather the clients spend the monies on more valuable advisory fees with us - which they often do. There is nothing complex about standard entity establishment (but the advice on entity structure is a different story)

Total costs are;

$537.50 for Company Incorporation (including the ASIC fee) Including GST
$137.50 for establishment of discretionary / family trust Inc GST
$440 Inc GST our fee to complete process.
$200 Stamp Duty to Victorian State Rev Office for trust deed
Total $ 1,315 Inc GST

You could easily spend another $500 to $1000 on structural or consulting advice with us but at least you get value for it. There is no value in paying $2500 for entity establishment alone.

So depending on what they are including in the $2500 it may or may not be a suitable fee.

[King]

I cost me $10 and one hour's solicitors costs some years back, but then life was simpler then.

If you want to save money, you don't need a company, you merely 'trading as' and register a business name under the trust, and create a bank account that way TFN you can do on the ATO website, and setting up of the trust should be straightforward with a solicitor, who will open the account with a minimal deposit (hence the $10 in my case).

I image in would be you and your spouse as trustees, and you can disperse income to the kids for tax purposes. Registration costs vary, but the process should be fairly painless.

Down the track you can create a company - I quoted what it cost me in another thread - if you search by username here you can find it.

[akagrp]

Hello David

Pricing can vary from accountant to accountant as well as what state you are planning to have the Trust Deeds stamped in.

The other factor you need to consider is the type of trust you are talking about as there are a number of different trusts for different purposes, the most common trusts are Discretionary Trusts, Unit Trusts, Testimonial Trust, and Property Trusts, DT tend to be the cheapest.

You really need to also consider why you are establishing the trust, if one of the reasons is to property your assets then having yourself as Trustee of the Trust is not a good protection.

Setting up a company is cheap as quoted here, average price is around $600 for a full set of papers (be careful for the budget options as they do not all provide company Constitutions which you will need if seeking finance)

Stamp Duty is a cost that you cannot avoid if setting up a trust, as I do not know where you are based I have quoted major states
NSW $500 + $10 for each Copy of Deeds normally recommend to have 2 copies
VIC $200
QLD NIL
SA Only for Unit Trusts and duty detailed
WA NIL

You also need to consider Land Tax issues if Trust in particular property held in NSW.

There are also other issues with Trusts, you need to consider if you reason is for tax minimisation then wait until later later this month when the government announces key tax reforms planned for the next 25 years from the report handed down by Dr Ken Henry

If you are in Sydney happy to discuss with you over the phone, also for clients that continue to use our services for accounts and tax returns we rebate the cost of ABN & GST Registration.

[akagrp]

Originally Posted by King

I cost me $10 and one hour's solicitors costs some years back, but then life was simpler then.

If you want to save money, you don't need a company, you merely 'trading as' and register a business name under the trust, and create a bank account that way TFN you can do on the ATO website, and setting up of the trust should be straightforward with a solicitor, who will open the account with a minimal deposit (hence the $10 in my case).

I image in would be you and your spouse as trustees, and you can disperse income to the kids for tax purposes. Registration costs vary, but the process should be fairly painless.

Down the track you can create a company - I quoted what it cost me in another thread - if you search by username here you can find it.

That must have been a good 14 years back?

[King]

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[Angus]

Hi David
Although companies and trust deeds may appear to be relatively generic, this is not wholly the case. Company constitutions and trust deeds prepared by leading solicitors will contain items that may assist your business down the track and which cheaper alternatives won't necessarily have. My business uses DBA Lawyers for all trust deeds and companies and they are known as being amongst Australia's leading providers. They typically provide deeds to accountants who then provide them to their clients, so perhaps check with your accountant which solicitor is being used.
cheers
Angus Morrison
http://www.liftbusiness.com.au