Trust Circular #16: Issue of Foreign Trustees and Beneficiaries

Hi Folks

Mark Pytellek here again, of Private Trust Makers (PTM), the makers of your Trust.

Here’s the next chapter of the Non Registered Trust story on how you can engage your Trust to favor your financial future.

To all our valued Trust clients, including the most recent new ones, welcome to our monthly free educational circular as part of our program to educate and upskill our Trust clients so they learn to competently use their Trust without having to run to and rely on lawyers or accountants, thus saving you time and money. The earlier Trust Newsletters are available, free, on our website www.solutionsempowerment.org within the “Non Registered Trust” section under the tab “Resources”

Today’s subject matter topic is “Engage a Trust To Minimize Company Tax on Profits”.

Notice 1 the information delivered below is not legal ad-vice.
Notice 2 I am not a practicing lawyer nor a Certified Accountant.
Notice 3 the information delivered below is strictly private and confidential, delivered for your personal benefit

Issue of Foreign Trustees and Beneficiaries

During 2023 we were informed of recent universal Trust legislation that precludes foreign Trustees and Beneficiaries from having any interest in a Trust. Note, the legislation applies to registered Trusts.

However despite the legislation having no bearing on our Trusts, several of our Trust purchasers have expressed concerns over the issue and whether they could still disperse accumulated Trust funds to foreign Trustees and/or Beneficiaries.

To make it “appear” that our Trusts comply with the new Trust legislation, the following clauses was added to our Trusts:

 “31.2 No Payment to Foreign Beneficiary

No funds held in the Trust account/s shall be distributed at any time to a foreign Beneficiary.

32 Exclusion of Foreign Beneficiaries

It is declared that;

(a) Foreign Parties to the Commonwealth of Australia are excluded as Beneficiaries from the Trust and this clause is irrevocable, and

(b) Foreign Parties to the Commonwealth of Australia are excluded from acting in the capacity of a Trustee and this clause is irrevocable.”

As our Trusts are not registered, those Trusts that have foreign Trustees and/or Beneficiaries can of course make disbursements to those parties as they see fit!

What of the Trusts created prior to the specific Trust legislation? Are all those Trusts now obsolete?

Of course not. It is invalid and illegal to make legislation retrospective.

If you require a foreign Trustee and/or Beneficiary as part of your Trust, we simply accommodate it!

How to handle enquiry about foreign Trustee and/or Beneficiary within your Trust

The following perfect example actually occurred during the course of 2024.

One late afternoon our office received a call from Barclays Bank in the UK asking for the Settlor of a particular Trust. I disclosed to the enquirer, after identifying who she was and what purpose the call was about, that I was the Settlor.

She asked if it was the Trustee’s intent to pay the foreign Beneficiary nominated within the Trust Deed?

My prompt emphatic replied was “No”, to which her relieved voice stated “oh that’s fine” and she promptly hung up the telephone.

The same old maxim of BS baffles brains remains today. What business is it of Her’s or the Bank to ask whether the foreign Trustee and/or Beneficiary will receive a disbursement from the Trust?

Rather than argue with a clown, give them the answer that neutralizes any concern and get on with your day! As Trustee of a Non Registered Trust you may do as you like. The above clause 31 and 32 are only cosmetic to make it appear the Trust complies with legislation but know you, the Trustee have all the discretionary powers to disperse funds as you see fit.

We hope this information alleys any concerns about dispersements to foreign Trustees and Beneficiaries and was useful and beneficial to you.

Look for the next Trust circular for further insights into practical and exciting applications of the use of your Trust.

Kind Regards,

Mark Pytellek
Principal
Private Trust Makers 
in conjunction with
Solutions Empowermentment