Roles within a private trust 043-04020070

From 1 January 2002, new rules were implemented for the way private trusts are treated under the income and assets tests. If a customer is involved in a private trust, the income and assets of that trust may be taken into account (attributed to the customer) when working out their income support payments or concessions.

Note: different rules and roles apply to an approved Special Disability Trust (SDT). A SDT's income is exempt from the income test. The SDT's assets are exempt from the assets test as long as the assets are not over the concessional asset limit.

A customer could have more than one role in the private trust. A customer's involvement in a private trust can be in any of the following capacities:

• Settlor, Creator - a settlor or creator generally contributes an amount (usually a nominal amount of $10-$50) to start the trust. The settlor may have no further involvement in the trust after it is set up. Trusts may be established in a will after death
• Testator - the maker of a will is called a 'testator'
• Contributor - a customer who contributes capital to a trust
• Beneficiary - a beneficiary is a customer or entity capable of receiving a benefit from the trust, either by way of income or capital distributions
• Trustee - the trustee holds trust property for the benefit of the beneficiaries in accordance with the trust document. The trustee may be an individual or a private company
• Appointor, Principal, Guardian - this customer often has the power to appoint or dismiss the trustee, veto the trustee's decisions or vary the trust deed
• Executor, Administrator - the customer who is named in a will as having the responsibility of dealing with the property of a deceased estate in accordance with the wishes of the testator is called the 'executor'. Where the deceased person did not make a will (for example, died intestate) or did not name an executor in their will, the Court will appoint someone to deal with the property of the estate
• Shareholder of a Corporate Trustee - a customer may become a shareholder of the corporate trustee in a number of ways - by purchasing shares, having shares transferred to them by way of a gift from an associate, receiving shares as an inheritance from a deceased estate
• Director of a Corporate Trustee - a customer may become a director when the trustee company is first set up, or may be appointed by another director or by a vote of shareholders of the trustee company
• Public Officer - a public officer will only be appointed for a trust if there are no Australian resident trustees
• Employee - an employee may receive remuneration for their personal efforts in money or moneys worth, for example, wages, fees, commissions, fringe benefits, super contributions. A customer who is only an employee, has no other involvement in the trust and is not an associate will have their remuneration assessed as an employee
• Associate - a customer may exert informal control over a trust even though they are not an appointor or trustee. For example, an accountant, solicitor or other professional may be acting under instructions from a customer

Note: since 1 January 2002, the assessment of a private trust must be done by a Complex Assessment Officer (CAO).

A customer may be involved in a private trust in more than one way. For example, a customer may be both trustee and beneficiary. The CAO will need to establish each way in which a customer is involved. This information is on the Module PT - Private Trust (MOD PT) or Module SDT - Special Disability Trust (SDT).