Can An Accountant Set Up A Family Trust In Australia?

Family trusts are a popular way for Australian business owners to manage profits, protect assets and plan for tax across the family group.

But when it’s time to actually set one up, a common question is: can your accountant do it, or do you need a lawyer?

In short, accountants play a crucial role - but a family trust is created by a legal document (the trust deed), so you’ll want a lawyer involved to draft and properly execute that deed. Your accountant and lawyer should work together so the structure supports your business, tax goals and long-term plans.

In this guide, we’ll walk you through who does what, the key steps to set up a family trust for your business, the decisions you’ll need to make in the trust deed, and how to avoid common pitfalls.

What Is A Family Trust (And Why Do Businesses Use Them)?

A family trust (often a discretionary trust) is a legal arrangement where a trustee holds and manages assets for the benefit of beneficiaries, typically members of the same family.

For small businesses, common uses include holding business assets, owning shares in a trading company, distributing profits to family members within tax rules, and protecting assets from operational risk in the trading entity.

At the centre is the trust deed - the written instrument that creates the trust and sets the rules. Because a deed is a formal legal instrument, it’s vital it’s drafted correctly and executed properly. If you’re new to deeds, it helps to understand what a deed is and why the formalities matter.

For a broader primer on how trusts work for businesses, see our overview of trusts in Australia.

Can An Accountant Set Up A Family Trust?

Accountants are integral to designing and running your structure - but the act of “setting up” a trust is a legal step created by a trust deed. Drafting that deed is legal work. In practice, this means your accountant can advise on tax strategy, model distributions, help you apply for TFNs/ABNs, and coordinate the setup, while a lawyer prepares and finalises the trust deed (and any company paperwork if you opt for a corporate trustee).

This division of roles protects you. If a deed is poorly drafted or executed, you may face tax issues, bank refusals, or disputes later - and it can be costly or impossible to fix. Working with a lawyer on the deed ensures the trust actually exists and functions as intended, while your accountant ensures it’s tax-efficient and administratively sound.

Who Does What: Accountant Vs Lawyer Vs You

It helps to think of trust setup as a team effort. Here’s how it typically breaks down:

• Accountant: Advises on tax planning and profit distribution, models scenarios, recommends trustee structure (individual vs corporate), assists with applications for ABN/TFN, GST, and bank account setup, and guides compliance year-on-year.
• Lawyer: Drafts and settles the trust deed, prepares deeds of variation or appointment when roles change, advises on control features (appointor powers, trustee replacement), and drafts related documents (loan agreements, service agreements) between your entities.
• You (the business owner): Sets commercial goals, chooses key roles (trustee, appointor), approves the deed settings, signs documents correctly, and ensures the trust is used in line with the deed.

Key point: the deed is your “rulebook”. Once executed, changing it later can be complex and may risk a “resettlement”. Get it right at the start.

Step-By-Step: How To Set Up A Family Trust For Your Business

1) Map Your Structure And Goals

Clarify what the trust will hold: business assets directly, or shares in your trading company. Identify beneficiaries (family members/entities) and think ahead about profit distribution, asset protection and succession.

If the trust will own shares in your company, consider how you’ll handle owner controls at the company level too (for example, via a Shareholders Agreement among founders).

2) Choose The Trustee (Individual Or Corporate)

A corporate trustee (a separate company acting as trustee) is common for asset protection and administration. If you go this route, you’ll need to register a company and adopt an appropriate Company Constitution that suits a trustee company. Remember the resident director requirements when appointing directors.

Individual trustees are possible, but harder to change later and less clean for banking and asset transfers.

3) Settle The Trust Deed (Lawyer-Led)

Your lawyer drafts the trust deed to reflect your structure and goals. You’ll nominate the trustee, beneficiaries (or classes), appointor/principal (the person who can replace the trustee), distribution powers, vesting date, and other rules.

The deed is then executed in accordance with deed requirements, including any state stamp duty requirements (if applicable). You’ll also need a nominal settlor (who provides the initial settlement sum). For context on this role, see the role of a settlor.

4) Apply For ABN/TFN And Register For Taxes

Once the deed exists, your accountant can obtain the trust’s TFN and ABN, and register for GST or PAYG where needed. If you’re deciding when you need each identifier, read our guide on trust requirements (ACN, ABN, TFN).

5) Open Bank Accounts And Put The Trust To Work

Open dedicated accounts in the trustee’s capacity as trustee for the trust. Execute any related intra-group agreements (for example, a loan deed between the trust and your trading company, or a service agreement if the trust provides management services).

If the trust will hold shares in your company, confirm the share register and any related control documents align with your plan. Many owners also use the trust to beneficially hold shares through a trust for flexibility and protection.

6) Keep Records And Review Annually

Maintain minutes for key decisions, trustee resolutions for distributions, and any deeds of appointment or variation. Your accountant will manage tax compliance; your lawyer should review legal control settings as your business and family circumstances evolve.

Key Legal Decisions Inside The Trust Deed

These decisions shape control, flexibility and long-term risk. Get advice before you lock them in.

• Trustee Powers And Liability: Clarify what the trustee can do, how indemnities work, and how liabilities are limited to trust assets. A corporate trustee helps here but the deed terms matter too.
• Appointor/Principal: This role can hire and fire the trustee. It’s often the real “control lever”. Think through succession if the appointor passes away or becomes incapacitated.
• Beneficiaries And Classes: Ensure your intended family members/entities are within scope, with clear classes and definitions to avoid ambiguity.
• Distribution Powers And Streaming: The deed should allow streaming (e.g., capital gains, franked dividends) if you intend to use it, and set rules for how and when distributions are resolved.
• Vesting Date: Trusts have an end date. Choose a suitable period and plan for what happens on vesting.
• Amendment Power: Your deed may allow changes via a deed of variation. This is useful, but not unlimited - careless changes can risk a resettlement. When you need to update terms, a lawyer will prepare a Deed of Variation to avoid unintended consequences.

Some trusts are designed to be unchangeable in key ways. If you’re weighing this option, get specialist advice and read our overview of irrevocable trusts and when they’re used.

Using A Family Trust Alongside Your Trading Company

Many owners use a “two-entity” structure: a trading company runs the business; the family trust holds the shares in that company (and sometimes owns key assets). This can separate operating risk from wealth, and gives flexibility in how profits flow to family beneficiaries.

When multiple founders are involved, capture decision-making and exit mechanics in a Shareholders Agreement, and ensure voting rights match your intent. Consider whether founder shares are held personally or via each founder’s family trust - and document that properly.

If the trust will own shares or IP, ensure the trustee company’s constitution is appropriate and that you’ve set up any intercompany licences or loan agreements you’ll need to make the structure work day-to-day.

What Your Accountant Can Help With (And Where Legal Advice Is Essential)

Accountant-Led Tasks

• Assessing whether a family trust suits your tax profile and business plan.
• Recommending trustee structure (individual or corporate) from a tax and admin perspective.
• Applying for the trust’s TFN/ABN and registering for GST/PAYG if required.
• Preparing annual distribution minutes and ensuring tax returns reflect the deed rules.

Lawyer-Led Tasks

• Drafting and executing the trust deed (and confirming deed formalities are satisfied).
• Advising on control settings (appointor powers, trustee changes, succession planning).
• Preparing deeds of appointment/removal of trustee and any variations over time.
• Drafting intra-group agreements (loan deeds, IP licences, services agreements) to align with your structure.

Remember, the deed is the foundation. If the deed conflicts with tax assumptions or business reality, you may not get the outcomes you expect. Coordinated advice avoids those mismatches.

Common Mistakes When Setting Up A Family Trust

• Using a generic deed that doesn’t fit your plan: “Template” deeds often miss key streaming powers or appointor settings. A custom deed aligned to your strategy is safer.
• Incorrect execution: Deeds have strict signing rules. Mistakes here can undermine the trust’s validity. Ensure it’s executed as a deed and dated correctly.
• Confusing personal and trust capacity: Open accounts and sign contracts in the trustee’s capacity for the trust, not in a personal capacity.
• Skipping corporate trustee: Individual trustees can be harder to replace and less clean for banking. A corporate trustee is often more practical for business-focused trusts.
• No plan for control on death/incapacity: If the appointor role is silent, control may fall in unexpected ways. Build a clear succession pathway.
• Unrecorded or casual intra-group loans: Document loans and inter-entity arrangements to avoid tax and compliance issues.
• Forgetting the end date: Approaching vesting without a strategy can trigger unintended outcomes. Keep an eye on the timeline.

Do Family Trusts Work For Every Business?

Family trusts are flexible, but they’re not a one-size-fits-all solution. For example, some founders prefer a unit trust or direct company ownership, depending on investor needs, profit retention and growth plans. Others use a family trust to hold IP or investments while the company trades.

The right answer depends on your business model, family circumstances and long-term strategy. If your trust will hold company shares or IP, weigh the pros and cons of beneficial ownership through a trust and ensure the deed language supports that approach.

Ongoing Compliance: Keep The Trust Healthy

After setup, treat the trust like a separate structure with its own paperwork:

• Prepare annual trustee resolutions for distributions that match the deed powers.
• Keep minutes for major decisions (changing trustees, appointor changes, loans, investments).
• Update roles via deed when people change (for example, appointor succession).
• Store signed deeds and variations in one secure place so banks and advisors can verify settings quickly.

If you’re contemplating a significant amendment, acquisition, refinance or restructure, get legal advice early - sometimes small wording changes can have big impacts on trust identity. For deeper background, see our guide to trusts, asset protection and planning.

Key Takeaways

• Accountants are essential to the strategy and tax administration of a family trust, but the trust is created by a legal deed - drafting and executing that deed is a lawyer’s job.
• Decide early whether to use a corporate trustee and align company paperwork (like the Company Constitution) with your structure.
• Key deed choices - appointor powers, distribution streaming, beneficiaries, vesting and amendment powers - drive control and flexibility for the life of the trust.
• If your trust will hold company shares or IP, ensure supporting documents (for example, a Shareholders Agreement and licences) match your plan.
• Keep trust records tight: execute resolutions, record variations via deed, and separate trust assets and accounts from personal or company funds.
• Before making structural changes, understand deeds and variations - and the risk of resettlement - by getting early legal advice and using a proper Deed of Variation if required.

If you’d like a consultation on setting up a family trust for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.