In part 2, we will be covering the more complex issues relating to Unit Trusts, such as the nature of a Unit Trust and the duties of the Trustee.

Unit trusts, as separate legal entities, are not like companies or individuals. They are unique, as they constitute a relationship between Trustee and beneficiary (also known as Unitholders). This relationship is, to some extent, formalised insofar as the rights that flow on from owning those units are structured similarly to company shares.

For the trust to be effective, the Settlor pays the Trustee an amount called the Settled Sum. The Trustee holds this property, along with any other agreed property or finances in accordance with the provisions of the Trust Deed. The Settled Sum, along with any other property, together comprises the Trust Fund.

Under the Trust Deed, it will usually specify when the trust comes to an end, called the Vesting Day. It can, however, be ended earlier if determined by the Trustee. In general, the Trust Fund is made available to all beneficiaries on the Vesting Day.

The Trustee is empowered to do all things that a company or individual could do with their own property. These powers of investment are specifically set out in the Trust Deed.

Trustee Duties

As a Trustee, you have many responsibilities, which are entrenched in statute and common law precedent. For example, a Trustee must act in good faith and with the best interests of the beneficiaries in mind. Of course, the Trustee must act in accordance with the law and the terms of the Trust Deed.

In terms of liability of the Trustee, the Trustee will not be liable for their actions as Trustee, provided they act in accordance with the law and the terms of the Trust Deed. This means that a claim made against the Trustee by a unitholder will not be enforceable if the Trustee can be shown to have acted in accordance with their duties.

If the Trustee is actually a company, then the actions taken by the Trustee must be made in the presence of the directors of the Trustee. This means that decisions made on behalf of the trust must be made in a company meeting in accordance with the company constitution, during which minutes should be kept.

Another duty is to maintain up-to-date accounting records. If the Trustee is also a company, the company ought to maintain two separate sets of accounting records, one that relates only to the business of the company, and the other for activities carried out as Trustee.

If the Trustee’s only role under the Trust Deed is to act as Trustee, i.e. no business transactions will be engaged in, the accounting records and bookkeeping should be fairly standardised, changing very little annually.

It is important that the company remains compliant with its duties conferred under the Corporations Act, such as the requirement to notify any changes in directors and their share ownership.

There are a number of financial transactions that need to be recorded on the books of account managed by the Trustee. These include things like distributions of income and any payments made, or receipts collected, by the Trustee. These transactions should be formalised on a profit/loss statement or balance sheet prepared for every financial year.


There are many legal considerations when setting up a Unit Trust, particularly in relation to the Trustee’s duties.

If you don’t fully understand these duties, or need assistance in drafting the terms of the Trust Deed, contact LegalVision on 1300 544 755. Our team of commercial lawyers will happily assist with setting up, administering, or advising on the rights and duties with respect to a Unit Trust.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at

View Privacy Policy