Understanding Trusts in Western Australia: A Guide for Individuals and Business Owners

July 8, 2025

What Are Trusts?


A Trust is a legal arrangement where a person or entity (the Trustee) holds and manages assets for the benefit of others (the Beneficiaries). The Trustee is responsible for administering the Trust in accordance with its terms and in the best interests of the Beneficiaries. Trusts are commonly used for asset protection, estate planning, and business structuring in Australia.


Key Parties in a Trust


  • Settlor: the person who creates the Trust and contributes the initial assets.
  • Trustee: the individual or company responsible for managing the Trust assets.
  • Beneficiaries: the people or entities who benefit from the Trust.
  • Appointor: the person who has the power to appoint or remove Trustees.


How Can Trusts Benefit Individuals and Business Owners?


Trusts offer a range of advantages for both personal and business purposes:


1. Asset Protection

Trusts can help shield assets from creditors, lawsuits, or family disputes, as the assets are legally owned by the Trustee, not the individual.


2. Estate Planning and Succession

Trusts allow for the smooth transfer of wealth to future generations, helping to provide for minor or vulnerable Beneficiaries.


3. Tax Planning

Trusts can offer tax flexibility. Income generated by Trust assets can be distributed among Beneficiaries, potentially reducing the overall tax liability.


4. Business Structuring

Trusts are often used by business owners to separate business assets from personal assets, manage risk, and facilitate succession planning.


5. Privacy

Trust arrangements are generally private, unlike Wills which become public during probate.


How Are Trusts Created in Australia?


Establishing a Trust in Australia involves several key steps:


1. Decide on the Type of Trust

Common types include:
Discretionary Trust: Trustee decides how income/capital is distributed among Beneficiaries. Common for family Trusts.

Unit Trust: Beneficiaries hold fixed units, similar to shareholders in a company. Often used for business or investment purposes.

Testamentary Trust: created by a Will, comes into effect upon the Will-maker’s death.


2. Prepare a Trust Deed

A Trust deed is a legal document that sets out the terms and conditions of the Trust, including the powers of the Trustee and the rights of the Beneficiaries.


3. Settle the Trust

The Settlor provides the initial asset (often a nominal sum) to establish the Trust.


4. Appoint Trustees and Beneficiaries

The Trust deed will name the Trustees and Beneficiaries. The Trustee must accept their role and responsibilities.


5. Stamp Duty and Registration

In Western Australia, unlike some other Australian states, stamp duty is not payable on the mere execution of a Trust deed and it does not need to be stamped. Registration with the Australian Taxation Office (ATO) will be necessary if the Trust will have a Tax File Number or Australian Business Number.


6. Ongoing Compliance

Trustees must comply with the terms of the Trust deed and relevant laws, including annual reporting and tax obligations.


If you are considering establishing a Trust, Crabtree Legal can provide tailored advice to ensure your Trust is structured to meet your personal or business needs.

Thank You to The Executive Centre and Attending Business Leaders

October 17, 2025
Crabtree Legal extends our sincere thanks to The Executive Centre for graciously hosting yesterday's Member Showcase lunch event, where our Director, Jonathan Crabtree, had the pleasure of presenting to fellow business owners. The session explored the limitations of Artificial Intelligence (AI) in drafting key legal documents for start-ups and Small to Medium Enterprises (SMEs). Together, we examined common pitfalls that arise when relying solely on automated drafting tools, including the risks of incomplete agreements, unenforceable clauses, and loss of commercial protection. We are particularly grateful to the business owners and entrepreneurs who attended and contributed to the discussion. Your questions, insights, and shared experiences sparked an engaging and practical conversation about balancing technological progress with the value of tailored legal advice. At Crabtree Legal, we remain committed to helping Perth’s business community make informed decisions as they grow and protect their ventures. Events like this highlight the strength of collaboration between local professionals and the importance of thoughtful, legally sound documentation in every stage of business development. To learn more about how we assist start-ups and SMEs with business structuring, shareholder agreements, and contract reviews, please contact us.

The Benefits of Testamentary Trust Wills Explained

September 9, 2025
Testamentary Trust Wills provide significant benefits for individuals and families planning the distribution of their estates in Western Australia, particularly in terms of asset protection, tax efficiency, and supporting vulnerable beneficiaries. These trusts are established within a Will and become effective upon death, offering tailored advantages for diverse family circumstances. Key Benefits of Testamentary Trust Wills Asset Protection Safeguards inheritance from creditors, bankruptcy, and family law disputes by holding assets within a trust rather than direct ownership by beneficiaries. Shields assets from potential misuse or waste by beneficiaries with high-risk behaviours such as gambling, financial instability, or poor money management. Protects funds from being included in divorce settlements, ensuring they remain accessible only to intended family members. Tax Advantages Optimises tax outcomes by enabling income splitting among beneficiaries, especially those on lower marginal tax rates. Allows income distributed to minor children (under 18) via a testamentary trust to receive the full adult tax-free threshold (around $19,000–$22,000 per child annually, tax-free), compared to only about $500 in a standard family trust. Provides flexibility to defer tax liabilities for overseas beneficiaries by controlling the timing and distribution of income. Support for Vulnerable and Young Beneficiaries Helps ensure responsible use of inherited assets by enabling trustees to set age thresholds (e.g., 21, 25, or older) for the release of funds to younger beneficiaries. Allows creation of specialised trusts for beneficiaries living with disabilities, including Social Security Act 1991 (Cth) compliant Special Disability Trusts. Can provide long-term security for those who require ongoing support, such as family members with health challenges or special needs. Estate Planning Flexibility Highly customisable trusts can be tailored for one person, an entire family, or multiple generations, addressing complex family or blended family situations. Enables control over how and when assets are distributed, including restricting access to certain beneficiaries or protecting inheritance lines within families. Trustees are chosen to ensure accountability, oversight, and alignment with the intentions of the Will-maker, often with recommendations for two trustees to reduce risks. Who Should Consider a Testamentary Trust Will? Individuals leaving substantial estates (often $2,000,000 or more) including superannuation or life insurance. Estates intended to support minor children, vulnerable adults, or those likely to face relationship or financial risks. Families wishing to maximise tax savings and asset protection across generations. Crabtree Legal: Expert Guidance for Your Estate Plan Crabtree Legal offers tailored advice on testamentary trust Wills to protect your legacy and secure your family’s future. Whether you need a simple Will or a complex estate plan, we support business owners, families, and individuals through every stage of estate planning, succession, and trust creation. Feel free to contact Crabtree Legal for a personalised consultation to explore how a testamentary trust Will could benefit your unique situation.

How Getting Married or Divorced Can Revoke Your Will

September 3, 2025
A person's Will in Western Australia is generally revoked by marriage or divorce, unless it's made with their specific intention to marry or divorce clearly stated in the Will (or there is other evidence which establishes this intention). What Happens If You Get Married Under section 14 of the Wills Act 1970 (WA), marriage automatically invalidates your existing Will, unless your Will expressly states it was made "in contemplation of marriage" to your intended spouse. If your Will is invalid and you pass away, your assets will be divided according to WA's intestacy laws, which may not reflect your wishes. The best practice is to obtain a new Will after marriage to ensure all your assets and intentions for your loved ones are protected. What Happens If You Get Divorced Section 14A of the Wills Act 1970 (WA) outlines that divorce also cancels your Will unless your Will shows a clear intent for it to remain valid after divorce. Practically speaking, the automatic revocation in section 14A makes sense, as it is unlikely that you would still want to appoint your former spouse as the Executor of your Will, or provide for them from your estate, after you have divorced. However, if you do not update your Will after divorce, there may be unintended consequences, such as assets going to your ex-spouse or confusion and disputes among family members. Why Updating Your Will Matters Failing to update your Will after marriage or divorce can lead to estate mismanagement, litigation, or your wishes not being honored. If your relationship status has changed, make an appointment to create or update your Will so all provisions accurately reflect your current wishes and protect your loved ones. This is especially important for blended families, business succession planning, and unique asset structures. Get A Will That Reflects Your Changed Circumstances At Crabtree Legal, a veteran-owned and operated law firm in Perth, we pride ourselves on delivering expert, practical advice and drafting for Wills, estate, and succession matters. If you or anyone you know has recently married or divorced, please refer them to us—it may be time to get a new Will to ensure their wishes and family's future are protected.