Establishing a trust – unintended consequences when it goes wrong!

Establishing a trust is simple, but often not done properly.

Unfortunately, it is common to see trust deeds that have not been properly signed or that the settlement moneys or cheques are not banked by the trust. Although these look like minor deficiencies, the failure to properly settle a trust can have unintended consequences, especially for a client's estate planning.

In the recent case of Re Lauer; Corby v Lyttleton [2017] VSC 728, the Court held that a trust was not properly established for the following reasons:

1. The settlor did not execute the deed.
2. There was no evidence the settled sum of $500 was ever given by the settlor to the trustee.
3. The beneficiaries were not sufficiently defined in the trust deed.