MGS Private · Trust Services

Amending Deeds for
Succession Planning

MGS Private advises on amending existing trust deeds to incorporate succession provisions — ensuring that on the death of the principals, income and capital are distributed according to the founders’ wishes, not at the discretion of a successor trustee.

Succession Deed Amendments

Adding succession provisions
to an existing trust

Many existing discretionary trusts were established without succession provisions — meaning that on the death of the principals (typically Mum and Dad), whoever takes control as trustee and appointor has unlimited discretion over how the trust’s assets are distributed. The children’s entitlements are entirely at the mercy of that discretion.

MGS Private advises on amending these existing deeds to incorporate succession provisions — restricting the trustee’s discretion after the principals’ deaths and ensuring income and capital are distributed in accordance with the founders’ wishes.

Whether the existing deed’s amendment clause permits the addition of succession provisions
Whether the amendment constitutes a resettlement — careful analysis required in each case
Whether stamp duty is triggered by the deed amendment in NSW or other States
Bloodline restrictions — limiting distributions to direct descendants only
Voter provisions — requiring agreement of a group before the deed can be further changed
Trustee succession — who takes over as trustee and appointor after the founders’ deaths
Drafting provisions appropriate to the family’s specific structure and needs

No stamp duty on the deed amendment. Adding succession provisions to a trust deed is generally not a dutiable transaction in most States — provided no property is transferred as part of the amendment and the amendment is within the scope of the deed’s existing amendment power. Specific advice is required for each State where the trust holds property.

Key Considerations

Before amending an existing deed for succession

Amendment Power Required

The critical threshold question is whether the existing deed contains a broad enough amendment clause to permit the addition of succession provisions. Many modern deeds do — but older deeds may have more restrictive amendment clauses that limit what can be done without triggering a resettlement.

Resettlement Risk

An amendment that goes beyond the deed’s amendment power — or that fundamentally changes the nature of the trust — may constitute a resettlement: a deemed disposal of all trust assets at market value, triggering CGT and potentially stamp duty. MGS Private analyses this risk for each specific deed.

No CGT on Amendment

Adding succession provisions to a trust deed does not itself trigger a CGT event — provided the amendment does not constitute a resettlement of the trust. The amendment must be within the scope of the deed’s existing amendment power and must not alter the fundamental character of the trust.

Alternative — New Succession Trust

Where the existing deed’s amendment clause is too restrictive, MGS Private advises on establishing a new Succession Trust and transferring assets to it — including the CGT and duty consequences of that transfer and how to minimise them.

Coordination with Wills

The succession provisions in the trust deed must be coordinated with the principals’ Wills — particularly in relation to the identity of trustees and appointors, and the relationship between trust distributions and the overall estate plan.

Existing trust without succession provisions?

Brief MGS Private through your accountant to assess whether amendment is possible and what it would involve.

(02) 9231 5111 contact@macquariegs.com.au

Amending Deeds forSuccession Planning

Adding succession provisionsto an existing trust

Key Considerations

Existing trust without succession provisions?

Amending Deeds for
Succession Planning

Adding succession provisions
to an existing trust