August two minute update
Preparing for the Trusts Bill 2017
The latest version of the Bill includes, among other things, making sufficient information available to beneficiaries (Sections 45-51), the provision of special trust advisor roles (Section 70-72), and extending perpetuity periods to 125 years.
We’re not waiting for the Bill to be passed to help users prepare.
Special Trust Advisors - The ability to designate advisory trustees (special trust advisor in the current Act) is already in place in Trustworks. We’ll also add resolutions to appoint special trust advisors by various parties [responsible trustees can appoint advisory trustees under the current act, but not in the draft Bill], plus resolutions around their remuneration once the legislation has passed.
Perpetuity Periods - Our standard trust deed provides that the perpetuity period is 80 years or such later date where any legislation extends the perpetuity period. Vesting dates can be easily set for 125 years from settlement date.
Options for using Trustworks to give beneficiaries access to trust information
Regardless of how little or how much information trustees wish to disclose to beneficiaries, there’s an easy and appropriate option available in Trustworks.
- You can download the trust profile.
- You can easily download trust documents, singly or in bulk.
- You can easily e-mail documents directly from Trustworks to send to beneficiaries, either singly or in bulk.
- There are various reports on assets, liabilities, income, distributions and more that can be generated.
- You can give beneficiaries read-only or greater access to Trustworks. Please note they’ll currently be able to see all information.
- It’s possible to make certain documents ‘Confidential’ when uploading them and set user access rights as not being able to open them. Currently this is only available for firm users, but will be made available more broadly. This would mean that access could be given for beneficiaries to read certain documents in Trustworks, but not others (perhaps Letter/Memorandum of Wishes, Wills, EPA’s) that the settlors or trustees don’t wish to share.
Don’t want to be a trustee? There are other options.
Being a trustee involves a degree of specialist knowledge and skills. And while using Trustworks can help mitigate the risks involved, it can’t eliminate them.
If being a trustee is not something you wish to remain doing, there are alternatives to resigning and leaving it to the remaining trustees to find a replacement independent trustee. A replacement trustee could be someone interested in doing legal or accounting work for the trust, too. One solution is for the trust to appoint a specialist trustee company as a replacement, while you remain the accounting or legal advisor to the trust. Below is a list of such trustee firms you could consider. They all use Trustworks, meaning you could remain connected to each trust via multi-party subscriptions in order to ensure seamless ongoing management.
Argos Fiduciary Services: Mark Chan -09 281 8373 - firstname.lastname@example.org
Comac: Gary Fitzpatrick -09 410 6155 - email@example.com
Helio Trusts: Ryan McLaren -03 390 1676 - firstname.lastname@example.org
Heritage Trustee: Edward Russell -09 9723851- email@example.com
New company resolutions and workflows: authorising directors’ remuneration
As outlined in our July newsletter, any directors’ remuneration or benefits not properly authorised, going back up to six years, could instead be treated as a loan and required to be repaid if the company were ever liquidated. A liquidator from a ‘Big 4’ firm recently advised us that this is standard practice. So making sure this and other legal requirements and best-practice measures are undertaken properly is a great reason why your firm should be the registered office for clients. You can then justify charging properly for your services and use Companyworks to help you deliver the above (see letter templates below).
We’ve added the following precedents and a workflow to help you authorise directors remuneration and benefits.
Checklist – Authorising Director remuneration and other benefits
Not161 - Notice of directors' meeting to authorise director remuneration or other benefits
Min161 - Minutes of directors' meeting to authorise director remuneration or other benefits
Res161 - Directors' resolution to authorise director remuneration or other benefits
Cert161 Directors certificate authorising director remuneration or other benefits
Updated letter templates: offering to be registered office and upgrading service
We’ve updated our template letter, through which firms who do not act as the registered office can offer this service to their clients. (‘offer letter’). We’ve also produced one for firms who already do act as the registered office, but who only charge a small fee for basic services, such as filing annual returns. This outlines in more detail the requirements of the registered office plus best-practice measures your firm can deliver (‘upgrade service letter’).
If you’d like a copy of either letter, please email firstname.lastname@example.org with which template you’d like and we’ll send it to you.
Updated workflows for director changes
The workflows for Appointment of a Director, Death of a Director, Resignation of a Director and Removal of a Director have been updated with reminders around requirements for remaining directors.
Tempted by cheap software?
Read what the experts have to say:
Join a webinar demonstration
Email your name and the date you’d like to attend to email@example.com and we’ll respond with login details.
Companyworks - Mon 11th September @ 10.30am
Trustworks - Tues 12th September @ 2.30pm
Using Precedents - Tues 12th September @ 9.30am
Preparing for AML/CFT Phase Two
The new AML/CFT Legislation recently passed its second reading in parliament, and is set to become law in July 2018. We're in the process of designing a robust set of tools to help you manage your AML/CFT obligations and will keep you updated as these progress.
In the meantime, however, there are things you can start doing now in Connectworks to help you prepare. One is to make sure that your company share registers correctly record where shares parcel is held by a “non-natural person”, such as a trust or other company.
Under the Act, you will be required to perform client due diligence (CDD) on the beneficial owners of your client companies, including any natural person who holds 25% or more of the company's shares.
Where non-natural persons hold 25% or more of a company's shares, you will therefore need to identify the beneficial owner(s) of those shareholdings - and so on - until you reach the beneficial owners of the shares who are natural persons.
This can be an arduous process, especially as it is sometimes not obvious that a beneficial owner of a shareholding even needs to be sought. For example, where you have multiple non-natural persons who individually hold less than 25% of a company's shares, but collectively more than 25%, it is possible that these non-natural persons have a common beneficial owner, who is therefore themselves a beneficial owner of the company.
One of the ways we want to make your CDD easier is by helping you to identify where a natural person is the immediate beneficial owner of your client entities, or where further searches need to be done to identify the beneficial owners of non-natural person shareholders.
Our goal is to make it quick and easy to see which of your clients have natural persons with 25% or greater shareholdings, or non-natural persons individually with 25% or greater shareholdings, or non-natural persons collectively with 25% or greater shareholdings.
However, we can only do this if the shareholdings in your Companyworks share register are correctly recorded as being held by natural or non-natural persons. In Companyworks you already have the ability to record a share parcel as being owned by a trust or company as well as recording the ownership by individuals as per the Companies Office share register.
Where the profiles for your client companies have been imported from the Companies Office, all shareholdings are automatically set as being held by natural persons. So in preparation for the arrival of AML/CFT Phase 2, we recommend that you review the share registers for your companies in Companyworks, to make sure that the non-natural shareholders are also correctly recorded.
We've put together an article in our Knowledgebase on how to do this. You can read it here.
We'll continue to keep you updated on our AML/CFT tools, and to identify ways you can begin preparing now.