I have a client with an extremely old Trust Deed. Is it possible to have it modernised or to adopt a new deed?
Unfortunately, we’re unable to replace or modernise trust deeds of existing trusts (except for superannuation funds), as this is highly likely to resettle the trust.
It is commonly accepted that small changes to a trust deed, such as the addition of a trust power, will not resettle the trust, but that a change to the beneficiaries, and especially the adoption of an entirely new deed, can resettle the trust.
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.
If it’s a minor change you’re after (e.g. a particular clause that you are concerned about or a power you would like to include in the deed), then we may be able to assist. If this is the case, please send an executed copy of the deed and an explanation of the power you’d like to include/vary for our legal team to consider.
If it’s a full deed replacement you’re after, we would recommend seeking external legal advice.