Q&As

Ken Schurgott on Mastering Testamentary Trusts

Thursday May 10, 2018

Ken Schurgott is a Solicitor-Director of Schurgott & Co Lawyers, specialising in taxation matters (including State Taxes, stamp duty, payroll tax and land tax) and with extensive experience in business structuring, business sales and acquisitions, asset protection, succession planning and trust and estate law. Ken is very experienced in tax dispute matters, negotiations for settlements, mediations and conciliations and litigation. He regularly appears before the AAT and NCAT and instructs counsel in matters before the Courts. 

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Ken has been heavily involved in consultations with the ATO and Treasury on matters involving trusts. Ken was a member of the Board of Taxation Working Group on 2011 Report on the Taxation of Collective Investment Vehicles which led to the introduction of the AMIT regime. He was National President of The Tax Institute in 2012.

Legalwise Seminars interviewed Ken about the benefits, challenges and developments in the area of testamentary discretionary trusts.

Read his Q&A below and learn more from Ken at the seminar, Wills and Estates Masterclass: Elevating your Practice.

Tell us about your law firm and day-to-day work?

My law firm is a two-person corporate legal practice, comprising of myself and my son, Andrew. I have been a partner in large and sizable law firms over the years, but now practise on my own without the demands from HR, PR and internal accountant and debt collectors.

Day-to-day, I practise law principally with high net wealth individuals controlling large and complicated private groups. My work ranges from business sales and purchase, restructuring and tax planning, through to drafting wills for the controllers and/or their families. Managing tax disputes is also a large part of the practice.

Why is “Mastering Testamentary Trusts” such an important seminar topic?

Testamentary Trusts are a frequent part of the overall structuring of the succession plan for high net wealth individuals.

What are the common mistakes which practitioners make in relation to Testamentary Trusts?

One of the most difficult aspects, is to explain to the potential surviving spouse and/or children how discretionary style testamentary trusts work in practice. This is an area which practitioners have done poorly in Testamentary Trusts.

What income tax and stamp duty issues do practitioners need to consider when drafting Testamentary Trusts? 

"The 2018 Budget revealed the potential introduction of specific legislation to prevent injection of assets into a testamentary trust, to take advantage of the tax rates available to minors with a distribution from a trust."

Varying the will can lead to difficult stamp duty issues. From an income tax point of view, it is the sheer complications of the taxation of trusts which apply with equal force to testamentary trusts.

The 2018 Budget revealed the potential introduction of specific legislation to prevent injection of assets into a testamentary trust, to take advantage of the tax rates available to minors with a distribution from a trust.

There is, as yet, just talk and no words - it will be interesting to see what emerges because I had thought that there was already legislation which prevented the concerns that are considered in the Budget.

What are the three key messages that delegates will take away after attending your session?

(1) Tax and stamp duty, and asset protection are important, but making the family comfortable with the arrangements are more important.

(2) Drafting can become complicated and that is not always in the best interests of the client and the family.

(3) Choose the trustees wisely.

Learn more from Ken at the seminar, Wills and Estates Masterclass: Elevating your Practice, in the Primus Hotel Sydney, Pitt St, on Wednesday, June 6, 2018.

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