Running a business often means thinking ahead, not just about today’s profits, but how to protect what you’ve built and look after your family’s future. That’s where a family trust business structure comes in. For many Australian business owners, a family trust offers a smart mix of asset protection, tax flexibility, and long-term planning. But it’s not a one-size-fits-all solution. That’s why getting the right advice before you dive in is so important. At Propeller Advisory, we’ll keep it simple, explain your options in plain English, and help you decide whether a family trust is the right move for your business.
What is a Family Trust Business Structure?
Think of a family trust like a protective bucket. You put your business assets and income into the bucket, and a trustee manages it on behalf of your family (the beneficiaries). The rules for how it all works are set out in a trust deed.
Unlike a company, a family trust isn’t a separate legal entity; it’s a legal arrangement for holding assets on behalf of your family. The trustee controls the assets, but the beneficiaries ultimately receive the benefits.
It might sound formal, but at its core, a family trust is simply a way to keep your assets safe and give you more control over how income and wealth are shared.
Why Choose a Family Trust Business Structure?
There are a few big reasons why family trusts are so popular with business owners:
- Protect your family’s wealth: If your business faces risks, your personal assets (like the family home) are usually out of reach.
- Flexibility at tax time: Income can be split among beneficiaries, which can reduce the overall tax you pay.
- Plan for the future: It’s easier to pass wealth or business interests down to the next generation.
- Boost credibility: In some industries, operating through a trust signals that you’re established and professional.
Things to Keep in Mind
Of course, a family trust isn’t always the perfect solution. Here’s what you need to consider:
- Costs: Setting up and maintaining a trust involves upfront and ongoing fees.
- Extra admin: Trustees have to keep records and meet ATO requirements each year.
- Restrictions: The trust deed can lock you into certain rules, so it’s important to get it set up properly.
For some, the benefits far outweigh the effort. For others, a simpler structure may be more practical. That’s where tailored advice makes all the difference.
How Propeller Advisory Can Help Set Up A Family Trust Business Structure
We know that business structures can feel overwhelming, especially when you’re busy running the day-to-day. That’s why we make the process straightforward.
If a family trust suits your situation, we’ll:
- Set it up correctly from day one.
- Draft the trust deed to match your family’s needs.
- Keep you compliant with ATO rules.
- Guide you with ongoing tax and business advice.
With Propeller, you’ll have peace of mind knowing your structure is built to support your goals, not get in the way of them. Setting up a family trust doesn’t need to be complicated. With the right advice, it can be a smart way to protect your assets, plan for the future and give your family peace of mind. Let’s make it easy for you. Book a chat with us or call 1800 PROPEL today.
Thinking About Setting Up a Company?
Still tossing up if a company is right for you? Let’s chat. We’ll make it simple, strategic, and tailored to your goals. We help service-based businesses build smarter, safer setups that support long-term growth. Contact us online, book a consultation, or call us on ☎ 1800 776 735.
FAQs
1. What’s the difference between a family trust and a company?
A company is a separate legal entity, while a family trust is a structure managed by a trustee for beneficiaries. Each has different tax and asset protection benefits.
2. Can I run my business through a family trust?
Yes. Many small businesses operate this way to protect assets and distribute income more flexibly.
3. How does tax work in a family trust?
Trusts usually don’t pay tax directly. Instead, income is distributed to beneficiaries, who pay tax at their own rates.
4. Who should be the trustee of a family trust?
It can be an individual or a company. Each option has pros and cons, and we’ll walk you through which is best for your circumstances.
5. How much does it cost to set up a family trust?
Costs vary depending on complexity, but you’ll need to factor in both the initial setup and ongoing compliance support.