How do I terminate a trust?

The termination or more colloquially, winding up of a trust, is far simpler than the deregistration of a company. Nonetheless certain requirements must be met for the termination to occur.

A trust will cease to exist when:

• It has been wound up according to the trust deed
• Once it has reached the vesting date stipulated or the end of the perpetuity period (80 years)
• There ceases to be trust property
• All beneficiaries of legal age resolve to vest the trust in accordance with the rule in Saunders v Vautier

It is important that you take the following points into account:

• That you are following processes outlined in the trust deed
• That you have received consents from any necessary parties to the trust, i.e appointor/s
• You have advertised for those with a claim to trust property. In some cases a beneficiary’s location may be unknown to a trustee, therefore the trustee needs to advertise to allow beneficiaries to present themselves.
• Identify beneficiaries and distribute all trust property
• Are there creditors? 
• Capital Gains Tax and Stamp Duty may apply upon termination
• Cancellation of trust bank accounts

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Updated — Sep 7, 2015