Individual vs Corporate Trustee: What’s Right for Your Family Trust?
Why Your Choice of Trustee Matters
When setting up a family trust, one of the most important decisions is choosing between an individual trustee and a corporate trustee. This choice can affect everything from asset protection to estate planning and tax efficiency.
What Is a Trustee?
A trustee is the legal entity responsible for managing the trust’s assets in the best interests of the beneficiaries. The trustee can be:
- An individual (or individuals)
- A company (corporate trustee)
Key Differences Between Individual and Corporate Trustees
| Feature | Individual Trustee | Corporate Trustee |
|---|---|---|
| Setup Cost | Low | Higher (due to company registration) |
| Ongoing Costs | Minimal | Annual ASIC fees |
| Succession | Complex (requires legal changes) | Simple (change directors) |
| Asset Protection | Lower | Higher (separate legal entity) |
| Perception | Informal | Professional |
Succession Planning Considerations
Corporate trustees make succession planning easier. If an individual trustee passes away or becomes incapacitated, the trust deed may require a new trustee to be appointed—potentially causing delays or disputes.
See: Understanding Family Trust Succession Planning
Which Option Is Right for You?
When to Consider an Individual Trustee
- You’re setting up a simple trust for family use
- You want to minimise setup costs
- You’re comfortable with more manual administration
When a Corporate Trustee Makes Sense
- You’re building long-term wealth or managing significant assets
- You want stronger asset protection
- You’re planning for intergenerational wealth transfer
See: Family Trusts in Australia – Tax Benefits and Strategies
Final Thoughts
Choosing the right trustee structure is a foundational step in setting up a trust. It’s worth considering your long-term goals, risk tolerance, and estate planning needs.
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Please note that this article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and seek professional advice before making any investment decision.
This information is true and correct as of 22 May 2025 prior to making any changes we recommend you read Government resources and seek Financial Advice prior to making any changes.