On 1 May 2025 the Queensland Attorney General announced a comprehensive review of the States trust law had been undertaken and the Trusts Bill 2025 which passed through parliament would replace the outdated Act.

The Attorney General said, “The Trusts Bill 2025 will replace the current, half-century-old Trusts Act 1973, with simplified legislation that removes obsolete provisions to better reflect community standards.”

“While many Queenslanders may be involved with a trust through a small business or family structure, there are so many more examples where they might interact with a trust in their everyday lives without realising it, including giving to charitable causes,” the Attorney-General said. 

Pleasingly this new legislation will modernise the way Queenslanders deal with trust law by incorporating modern legal standards and making sure administrative matters are dealt with in a more streamlined and expeditious manner.

Some of the key changes include:

The definition of trust property

Trust property will now include in the definition:

• Assets held under bare, constructive, or resulting trusts
• Land subject to personal residence licenses
• Estates of deceased persons administered through trusts

Core Statutory duties

The previous Act derived trustee’s duties from common law principles whereas now there are specific ‘core duties’:

• To act honestly and in good faith
• To act with the diligence and skill of a prudent person
• To maintain accurate trust accounts and provide them to beneficiaries upon request
• To adequately review all investments in a timely fashion

Appointment and removal of Trustees

Children, insolvent entities, or people disqualified by a court are now prohibited explicitly from serving as trustees.

Further a trustee with impaired capacity does not have to be removed by application to a court allowing administrators or attorneys of a trustee with impaired capacity along with insolvent trustees to appoint replacements.

Capital for beneficiary maintenance

Increased limits for a trustee to apply towards beneficiary maintenance, education and advancement to reflect modern financial requirements from $2,000 to $100,000 and adjusted for CPI annually.

Courts Jurisdiction

The Supreme court will have power to:

• Approve dealings with property held on trust for children or incapacitated persons
• Resolve disputes between trustees and beneficiaries
• Remove a delinquent trustee or disqualify the trustee from managing any other trusts in future
• Remove other officeholders such as an appointor
• Vary terms of the trust

The court will also have the power to remove other officeholders such as an appointor.

The District Court will now have jurisdiction within its monetary limits ($750,000) rather than it just being the sole jurisdiction of the Supreme Court.

Delegation and investment powers

Trustees ae now specifically allowed to delegate if there is appropriate oversight to agents, custodians, and investment managers.

Investment flexibility for trustees

The ‘prudent investor’ provisions will enable trustees to:

• Borrow against trust property for investment purposes
• Invest directly in real estate, including residential, commercial, and development land
• Lease or develop land owned by the trust
• Utilise diversified investment strategy in the best interest of the beneficiaries
• Remove the $10,000 limit on the amount a trustee is permitted to spend on the improvement or development of trust property without court approval

Record-Keeping and audit requirements

Trustees must maintain accurate, up-to-date records of:

• All trust property transactions, including income, expenditures, and capital distributions
• Communications with beneficiaries regarding financial matters
• Decisions related to investments, asset allocations, and beneficiary distributions

A new tiered system for annual audits:

• Small Trusts are exempt from mandatory audits if annual transactions fall below a prescribed monetary threshold which is to be advised
• Large Trusts: which will have a requirement for audits conducted by ASIC-registered auditors
• Digital Submissions which will require electronic filing of an audit report to the Department of Justice rather than paper based

Reporting to beneficiaries

Beneficiaries are now entitled to copies of trust account within 30 days of a request to a trustee and trustees are required to provide standardised annual financial summaries.  This is all subject to the trustee having the ability to redact any commercially sensitive details

One of the most important requirements are the document requirements when a trustee distributes capital or income.

Trustee remuneration

Whilst the old Act allowed trustees to claim ‘reasonable’ remuneration, the courts will now have power to review and reduce excessive fees or professional charges.

Vesting and transfer of trust property

The process of vesting trust property, particularly after the death or resignation of a trustee has been simplified where property or investments are concerned.

Property Law Act 2023 Amendments

One of the important mattes is that Section 201 of the Property Law Act 2023 (Qld) which will commence on 1 August 2025 sets a new fixed statutory perpetuity period for trusts of 125 years replacing the 80-year rule which required trust to vest property to the beneficiaries.

What should I do now and how can FC Lawyers help?

This is an opportune time for clients to review your existing trust deeds to ensure compliance with the new regime and to make sure any new trust deeds are compliant.

It is also important that if you own or are contemplating purchasing property in your trust your powers to do so are correct and if selling, transferring or developing property you avoid any legal or tax consequences.

The team at FC Lawyers have extensive experience in assisting clients in all aspects of their trust matters. Contact our team to discuss your needs.