First things first

A trust is not a legal entity, but a definition of rights, responsibilities and obligations involving the trustee(s) and the beneficiaries, as defined in the trust deed.

Nowadays, there is far greater use of sophisticated electronic storage, filing and backup – both onsite and offsite – of important documents. Where paper originals are used, even these are usually held in electronic form as backup.

In days gone by, however, important documents such as trust deeds were often not so diligently stored, through no fault of either the creator or the trustees and beneficiaries named within.

For various reasons: the passage of time, sale or closure of offices, destruction by fire – documents can be lost. While a trust deed may be lost, that does not mean that either it, or its meaning and intent, has ceased to exist. The deed stays in force, even though it may not be physically at hand.

Often, the loss may not even be realised until some intended transaction triggers the requirement to present it.

The first step, both from a common-sense perspective, and as a requirement of the Supreme Court, is that every attempt is made to locate it, and no stone should be left unturned.

The gravity of the situation

While we can’t see gravity, we know it’s there, and we know how it works.

Likewise, if a trustee(s) has been complying with the rules of a trust deed and carrying out what they know to be its intent – if bank accounts were originally established and could only have been so established had the institutions concerned sighted the deed – then under certain circumstances the court is able to implement a ‘presumption of regularity’.

This may sound like something your doctor would enquire about, but is in fact a determination by the court that if the behaviour has been clearly and consistently demonstrated, then the existence of the deed in certain form is legally inferred.

Same, same… but different

Perhaps banks, finance companies, or insurance companies used in the initial set-up phase may still have a copy on file.

Possibly the original creator has on file a ‘standard deed’ that was used as a template in the same timeframe. It may be possible to locate a deed from the office of the original creator that is a standard deed from that time. Nevertheless, a standard deed is not the original deed, and cannot be used as such.

One option would be to create a ‘deed of confirmation’ to restate the terms of the original deed. Another would be to continue without the original deed, choosing to comply with the state legislation on administration of trusts. However, there is no guarantee that institutions, or indeed the ATO, will find these solutions acceptable.

A further option is to wind up the original trust and start anew. This may well trigger Capital Gains Tax (CGT) or stamp duty obligations. If the trust has been largely idle, with minimal assets, then this may be an appealing option. If, on the other hand, the trust has significant assets, and more complicated arrangements of beneficiaries then this may not be desirable.

A lost trust deed is not the end of the world, and a definitive solution ratified by the state Supreme Court will end the matter. Professional legal advice is crucial to achieve a positive outcome.

Commercial Law – we live it every day

It will be easier with sound legal advice from the experts. Owen Hodge Lawyers. We are here to help. Contact us today if you have a question about any of the elements discussed in this article, or about commercial law. We will endeavor to assist you to the best of our abilities. Contact us today on 1800 770 780 or via email at [email protected].