Law of Commerce Assignment: Tanya's Trustee Role & Duties

This case study examines the legal implications of Tanya becoming a trustee, focusing on her responsibilities under the Trustee Act 1925 and the Corporations Act 2001. Tanya, a wealthy businesswoman and mother of six, established a company to save taxes and secure funds for her children. The analysis applies the Trust Act of Queensland to determine Tanya's eligibility as a trustee and the benefits for her beneficiaries. It explores her duties in managing the trust, including tax considerations and the importance of acting in the beneficiaries' best interests. The case study concludes that Tanya can legally be a trustee, outlining the advantages of tax benefits for her children and the legal framework she must adhere to. The document references key legal precedents and scholarly articles to support its analysis of trustee duties and responsibilities within the context of commercial law.

Running head: LAW OF COMMERCE
Law of Commerce
Name of the Student
Name of the University
Author note

1LAW OF COMMERCE
Issue
The concerned issue of this situation is whether Tanya can attain the position of a
Trustee and carry out the necessary duties.
Rule
According to the Trustee Act 1925, persons can be appointed to execute the statutory
duties. This act provides the authority and power for the appointment. However, based on the
Corporations Act, 2001, a trust is formed based on the relationship between the trustee and
the beneficiary. An original instrument of trust is required for the appointment of the trustees.
Such individual will be appointed as a trustee who has the legal capacity and ability as per the
AAZ v BBZ [2016] EWHC 3234. Therefore, as per the observation if no sort of relationship
exists between the beneficiary and the trustee then no rights can be executed by the trustee.
The usual duties of the trustee states that he can conserve and protect the trust fund for
getting rid of the capital and income for those individuals who are entitled to receive.
However, a trustee will therefore have an impound on the interest of the beneficiary. The
beneficiary must be used for the purpose to gratify the loss that has been given to the trust. It
has been determined in the legislation of Trust Act of Queensland that the terms mentioned
in the trust document will be applicable when a relationship is formed between the
beneficiary and the trustee (Van der Velde 2016). However, as it can be observed, the trustees
can be held liable personally for the loans or debts that are administered from the trust. It
should be indemnified from the property that have been incurred for executing the trustee’s
powers (Young 2015). The legislation further states that the trustees should manage the
affairs of tax where the procedure of registration in the tax system will also be included. In
the matter of Heathman v Lizer,, it was observed that when the trustees will carry out their
duties, it should be beneficial to the beneficiaries. The natural legal duties of a trustee must be

2LAW OF COMMERCE
followed and obeyed by giving importance and preference to the beneficiaries’ interest. The
significant legislation in Queensland shows the matters to which a trustee must have the
consideration in executing the power of the investment (Williamson et al. 2015). The duty of
the trustee is to make sure that the beneficiaries are getting benefitted due to the activities of
the trustees.
Application
In this situation, it can be stated that a company was set up by a wealthy
businesswoman who was a mother of six children. The company was formed by Tanya to
save taxes. The purpose or objective of Tanya was to decrease the amount of income tax that
has to be paid from her salary. She had taken this step to ensure and preserve the money for
her six children. She wanted to secure their future when they will be above the age of 21. The
law that can be applied is this scenario is the Trust Act of Queensland. Tanya wanted to be
the trustee by keeping her six children as the beneficiaries. By being the trustee she wanted to
save a lump sum amount for her children by being the trust and exercising the available
duties (Bryan, Vann and Thomas 2017). However, since she owned a company and can be
referred to as a legal person therefore, she is capable of being a trustee. By observing the tax
benefits, the general advantage of this situation is that any kind of income that is generated by
the trust from the activities of the business will be distributed to the beneficiaries in lower
tax. However, in this situation, the children of Tanya will enjoy the advantages. Once the
relevant rule is applied, it can be observed that the tax rate will be higher as compared to the
beneficiaries. Therefore, as the trustee, she must carry out the duties mentioned above for her
beneficiaries. She has to follow the Trust Act for the necessary rules. Thus, being a wealthy
business woman and owning a corporation, Tanya can be legally and officially be the trustee.
On the other hand, beneficiaries are generally referred to as those individuals who belong to
the age group of below 18. Individuals who have a high-income means in paying the income

3LAW OF COMMERCE
tax by being the trustee. Instead she can reduce the payment of income tax and save it for
future benefit of her children.
Conclusion
In the conclusion it can be stated that Tanya is eligible in becoming a trustee and
exercising the legal duties as mentioned in the legislation.

4LAW OF COMMERCE
References:
AAZ v BBZ [2016] EWHC 3234
Heathman v Lizer, 2016 Cal. App. Unpub. LEXIS 5079
Bryan, M., Vann, V. and Thomas, S.B., 2017. Equity and trusts in Australia. Cambridge
University Press.
Van der Velde, J., 2016. Trusts: Revaluation of assets by trustees. Bulletin (Law Society of
South Australia), 38(10), p.36.
Williamson, A., Luke, B., Leat, D. and Furneaux, C., 2017. Founders, Families, and Futures:
Perspectives on the Accountability of Australian Private Ancillary Funds. Nonprofit and
Voluntary Sector Quarterly, 46(4), pp.747-771.
Young, G., 2015. Trust protectors—an Australian perspective. Trusts & Trustees, 22(4),
pp.455-463.