- A family trust is a discretionary trust that holds assets for your family.
- Setup runs in six steps: trustee, deed, settle, duty, TFN/ABN, bank account.
- Trustees must record distribution resolutions by 30 June each year.
Quick answer: Here’s how to set up a family trust in Australia: choose a trustee and appointor, and name your beneficiaries in a deed. A settlor settles the trust with a small sum; you pay any stamp duty on the deed, register a TFN and ABN, and open a trust bank account. The deed can be signed in under a week.
Knowing how to set up a family trust properly matters, because the deed, the trustee and the ATO registrations all have to line up before the trust can do its job. This guide walks through the six family trust setup steps, what you need at each one and who usually handles it. If you’d rather hand the paperwork over, Sleek’s family trust setup service drafts the deed and handles the registrations for you.
What is a family trust in Australia and is it different from a discretionary trust?
A family trust is a discretionary trust set up to hold assets and income for members of one family. Most “family trusts” are discretionary trusts in structure; the difference is that a family trust has usually made a Family Trust Election with the ATO, which unlocks certain tax rules.
How does a family trust work in practice? Instead of owning assets in your own name, a trustee holds them and decides each year how income and capital are shared among the beneficiaries, within the limits of the family trust deed and tax law. At a minimum, a family trust involves four parties:
- Settlor: creates the trust by giving it a small initial sum.
- Trustee: holds the assets and makes distribution decisions.
- Beneficiaries: family members who can receive income or capital.
- Appointor: has the power to remove and replace the trustee.
A trust is not treated as a “family trust” for tax purposes just because of its name. The trustee has to make a formal Family Trust Election (FTE) with the ATO to access those rules.
Is a family trust right for you?
A family trust suits people who run a business or hold investments and want flexibility over who receives the income, plus some separation between those assets and their personal name. It suits you less if your income is low or irregular, or you want the simplest structure with the least admin.
Consider a family trust if you: | Think twice if you: |
|---|---|
Run a business or plan to start one | Are just starting out with low or irregular income |
Invest in property, shares or other assets | Operate as a simple sole trader |
Want flexibility to distribute income | Don’t need tax planning flexibility |
Need some protection from business risks | Want the simplest structure |
Are planning long-term wealth for your family | Prefer minimal compliance and admin |
When it fits, a family trust gives you:
- Flexible income distribution: the trustee can direct income to beneficiaries on lower tax rates and change the split each year.
- Asset separation: assets sit with the trustee, not you personally, which can reduce exposure to business risks, legal claims or credit issues.
- Ongoing control: the trustee decides how income and assets are used year after year, keeping decisions within the family.
- Estate and succession planning: assets can stay in the family and pass between generations under the deed’s rules.
- A fit for business owners and investors: it’s commonly used to hold investment assets and manage business income.
For the tax side in more depth, read our guide to family trust tax benefits. If you’re weighing up structures, compare a unit vs discretionary trust first.
How do you set up a family trust, step by step?
Here’s an at-a-glance look at the process:
Step | What you need | Who does it | Typical time |
|---|---|---|---|
1. Confirm a family trust suits you | Your income, assets, beneficiaries and goals | You, ideally with an adviser | Before you start |
2. Choose a trustee | An individual, or a company set up to act as trustee | You and your adviser | Decided before the deed is drafted |
3. Draft the trust deed | Trustee, appointor and beneficiary details | A lawyer or trust setup provider | Deed drafted and signed in under a week |
4. Settle the trust | A settlor and a small initial sum | The settlor and trustee | When the deed is signed |
5. Stamp duty and TFN/ABN | Signed deed; trustee and trust details | Trustee or provider, with your state revenue office and the ATO | After signing; duty within your state’s deadline |
6. Open a trust bank account | Trust TFN/ABN, deed and trustee ID | Trustee, with your bank | Once the TFN and ABN are issued |
We explain the steps in detail below:
Setting up a family trust follows six steps: confirm the structure suits you, choose a trustee, draft the family trust deed, settle the trust, deal with stamp duty and ATO registrations, then open a trust bank account. Each step below explains what’s involved.
Step 1: Confirm a family trust is right for you
Before setting up a family trust, check that it suits your situation. Consider:
- Your income level and where it comes from
- Whether you have beneficiaries on lower tax rates
- The assets you plan to hold in the trust
- Your long-term financial goals
A family trust works well in the right context, and getting advice early helps you avoid setting up the wrong structure.
Step 2: Choose a trustee
The trustee for a family trust manages the trust and makes the distribution decisions. You can choose an individual trustee, or a corporate trustee, which is a company set up to act as trustee.
For most situations a corporate trustee is the preferred option. It offers:
- Stronger asset protection
- Easier succession if people or roles change
- Better alignment with lenders, especially for property
If you’re unsure which suits you, our guide to choosing a corporate or individual trustee sets out the trade-offs.
Step 3: Draft the trust deed
The family trust deed is the legal foundation of your trust. It sets out:
- The trustee’s powers
- Who the beneficiaries are
- The rules for distributing income and capital
- The appointor’s role
A generic or poorly drafted deed can cause compliance problems or cost you the tax benefits you set the trust up for. A deed prepared for your situation keeps the structure legally sound.
Step 4: Settle the trust
The trust is formally created when the settlor gives the trustee a small initial sum and the deed is signed. At that point the trust legally exists. The settlor should not be a beneficiary or have any ongoing role in the trust.
Step 5: Stamp duty and TFN/ABN
Stamp duty rules for the trust deed vary by state and territory, and some states set strict timeframes for lodging and paying. Confirm the current requirements with your state revenue office before you finalise the setup.
Your trust is a separate entity for tax purposes and needs to be registered with the ATO. You’ll need:
- A Tax File Number (TFN), which is mandatory
- An Australian Business Number (ABN), if the trust carries on a business
- GST registration, if the trust’s GST turnover reaches AUD 75,000 or more (ATO, Registering for GST, checked 5 Nov 2026)
Step 6: Open a trust bank account and transfer your assets
Open a dedicated bank account in the trustee’s name, and run all trust income and expenses through it. Mixing trust money with personal accounts creates compliance risk.
Once the trust is set up, you can transfer assets into it, such as:
- Cash
- Shares
- Business assets
- Investment property
Transferring existing assets may trigger capital gains tax (CGT) or stamp duty, depending on the asset and the state. Get advice before you move anything.
Additional info: Family Trust Election (FTE)
A trust isn’t automatically a “family trust” for tax purposes. To access certain tax rules, the trustee must make a Family Trust Election with the ATO. An FTE can give access to:
- Trust loss provisions
- Franking credit benefits
- Other tax concessions
It also comes with restrictions on who can receive distributions, covered in the tax section below, so make this decision carefully.
Want the deed, trustee and registrations handled for you?
How much does it cost to set up a family trust in Australia in 2026?
Costs depend on the deed, trustee type and state duty. Sleek charges A$1,000 for Individual Trustees and A$1,791 for Corporate Trustees. Know more about our plans and inclusions: family trust setup cost.
How are family trusts taxed in Australia?
How does a family trust work at tax time? The trust itself usually pays no tax when all its income is distributed, because each beneficiary pays tax on their share at their own rate. The trustee must document trust distribution resolutions by 30 June each year.
Without a valid resolution, the trustee may be assessed on the trust’s income, and the ATO says that “may be at the top rate”; where the deed names a default beneficiary, that beneficiary can be assessed instead (ATO, Trustee resolutions, checked 5 Nov 2026). Once an FTE is in place, distributions outside the family group attract family trust distributions tax of 47% (ATO, Family trusts, checked 5 Nov 2026). Distributions to beneficiaries under 18 can also be taxed at higher rates, so read our guide to family trust tax benefits before you plan distributions.
Can you set up a family trust online in Australia?
Yes, you can set up a family trust online, but the family trust deed and the ATO registrations still need to be right for the trust to work as intended. A deed tailored to your family and correct TFN, ABN and GST registrations matter more than how the paperwork is lodged. If you want it done digitally with an expert checking each step, you can set up a family trust online with Sleek.
How Sleek helps you set up a family trust in Australia
Sleek drafts your family trust deed, sets up an individual or corporate trustee, and handles the TFN, ABN and GST registrations, so the structure is right from day one. After setup, our accounting for trusts covers the annual trust tax return and the 30 June resolutions, backed by our ASIC registered agent number 47659 and TPB registration 26131380. For more guides on running your structure, browse our business resources.
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Frequently Asked Questions
Can I be the trustee and a beneficiary of my own family trust?
Yes, you can be both a trustee and a beneficiary, and many family trusts are set up this way. The exception is being the only trustee and the only beneficiary at the same time, because legal and beneficial ownership would then sit with one person and the trust may not be valid. Adding other family members as beneficiaries, or using a corporate trustee, avoids the problem.
Should I use a trust or set up a new Pty Ltd?
A trust is mainly about distributing income flexibly and holding assets for a family, while a Pty Ltd is a separate legal entity that pays company tax and suits trading and growth. Many business owners use both, with a company acting as trustee or holding shares. If you’re comparing structures, start with our guide to choosing a company or sole trader structure.
Can you change the trustee of a family trust later?
Yes, you can replace the trustee for a family trust if the deed allows it, usually by the appointor removing the old trustee and appointing a new one in writing. You must tell the Australian Business Register about the new trustee within 28 days (ATO, Update your details, checked 5 Nov 2026). Moving trust property into the new trustee’s name can have stamp duty consequences in some states, so check with your state revenue office first.
