To answer the question briefly, all trustees need to sign the trust deed. Keep reading for important information on the general nature of trust deeds and the requirement for witnesses.
What is a trust deed?
A trust deed is a legal document that outlines the conditions and rules of the trust. It generally sets out things like:
- who the beneficiaries are
- the amount of money the beneficiaries receive
- the method of payment
- and specific conditions
Want a quick crash course on how trusts work? Click here.
Key parties to a trust
The terminology used when talking about trusts may be a bit confusing at first. If you want a bit of clarification, this article has you covered.
- Settlor– this is the person that puts the asset(s) into the trust.
- Trustees– these are the people that look after the trust and make sure that the beneficiaries receive their benefits. If you are wondering how to remove a trustee, give our article a quick read.
- Beneficiaries- are the people that benefit from the trust. They receive the assets from the settlor.
For a more comprehensive reading on the parties to a trust, their roles and obligations, click here to read our article explaining whether the settlor can also be a trustee.
Requirements of a trust deed
To be valid a trust deed must satisfy several requirements. These include that it is:
- prepared by someone who is competent as it is a legal document
- executed properly in line with state or territory laws
- up to date and reviewed regularly
- signed by all trustees
If you are looking for a trust deed, check out our easy to use and fill in Discretionary Trust Document down below.
Although you can download and fill these documents in yourself it is necessary to seek a lawyer to ensure that no complications or issues arise with the trust. Trusts can be quite complex and a range of issues can arise that can result in significant consequences for the beneficiaries involved.
Which parties need to sign?
As discussed above all trustees need to sign the trust deed for it to be valid. You should if you are trustee to sign “as trustee” following your name on all signature areas of the deed where required. For more clarification on how to sign as a trustee click here.
When signing as a trustee there has to be a witness present. The witness can not be a party to the trust either, meaning they can not be a beneficiary, settlor, or trustee.
Thinking about setting up a family trust? Click here to read our 2020 introductory guide.
Conclusion
All the trustees have to sign the trust deed otherwise the document is not legally binding. The signing has to be done in the presence of a witness or similar to not having a signature it becomes invalid. Lastly, when signing as a trustee make sure that you write “as trustee” following your name. Trusts are incredibly complicated and the case law surrounding the area leaves a lot of room for the danger of the trust failing. It is advisable that if you are looking to draft a trust deed you seek legal advice. Feel free to reach out to our network of expert trust lawyers.
