Trusts are used by many business owners to minimise personal liability and also to ensure their personal assets are not at risk.
We advise clients to also be aware that the directors of corporate trustees could still be made personally liable through s.197 of the Corporations Act 2001 where the company is not entitled to be fully indemnified out of the assets of the trust solely because of the corporate trustee;
Another reason for use of a corporate trustee is that companies do not have finite lives as would an individual stakeholder. If an individual dies or leaves then different directors can be appointed as directors of the corporate trustee. This can avoid all the trust assets from having to necessarily be transferred upon the individual’s departure or death.