# Trustees vs Beneficiaries

**Beneficiary** - A beneficiary is a person or entity that you legally designate to receive the benefits from your financial products. \
Eg For life insurance, that is the death benefit your policy will pay if you die.

#### **Beneficiaries responsibility**

* Can be a person, company or trustee of another trust
* have an entitlement to trust income or capital that is set out in the trust deed or they may acquire an entitlement because the trustee exercises a discretion to pay them income or capital.
* Generally, the beneficiaries are taxed on the net income of a trust based on their share of the trust's income – regardless of when or whether the income is actually paid to them.

  <br>

**Trustee** - A trustee takes legal ownership of the assets held by a trust and assumes fiduciary responsibility for managing those assets and carrying out the purposes of the trust.

**Corporate trustee -** Company that is a trustee

#### **Trustee responsibility**

* Personally liable for the debts of the trusts they administer (not Pty ltd)
* entitled to be indemnified out of the trust property for liabilities incurred in the proper exercise of the trustee's powers (except where a breach of trust has occurred)
* Under tax law, the trustee is responsible for managing the trust's tax affairs, including registering the trust in the tax system, lodging trust tax returns and paying some tax liabilities.

**indemnified** - compensate (someone) for harm or loss.

**More info on trusts**

{% embed url="<https://www.ato.gov.au/General/Trusts/Trust-income/>" %}

{% embed url="<https://www.ato.gov.au/general/trusts/trustees-and-beneficiaries/>" %}


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