Can InterDocs remove a beneficiary from an existing trust?
We are unable to remove beneficiaries of an existing trust due to the risk of resettling the trust or triggering duty issues.
When a "resettlement" occurs, the old trust is considered to come to an end and a new one begins. This generally happens where the trustee undertakes to do something (a new "trust") not considered when the trust was first established by the original settlor - therefore, the trust has been "resettled".
Effectively, the old trust disposes of all of its assets to the new trust, giving rise to CGT and stamp duty issues.
Stamp duty issues can also arise in some states and territories where particular beneficiaries are removed, or new beneficiaries are added – even if this is permitted by the trust deed.
We would recommend seeking independent legal advice in this situation. (We can refer you to a law firm who specialises in complex trust arrangements if you require.)