Naming A Trust? Keep The Lending Side In Mind

For example, Anderson Family Trust may be easier to administer than The Anderson Family Property Investment And Wealth Creation Trust.

There is no special naming formula that makes a trust acceptable to a lender. If the trust will eventually borrow to buy property, the lender is generally more concerned with the trust structure, trustee, trust deed, borrowing powers, guarantors and loan purpose than whether you have chosen the perfect name.

The other important distinction is that the trust name, trustee name, and business name are not necessarily the same.

What Is The Best Way To Name A Trust?

A practical trust name will usually be:

• Easy to reproduce consistently
• Easy for you and your advisers to identify
• Not unnecessarily long or complicated
• Clearly distinguishable from the trustee’s name
• Suitable for the trust’s expected long-term purpose
• Checked by your solicitor or accountant before the trust is established

For example:

Anderson Family Trust

is considerably easier to work with than:

The Anderson Family Property Investment And Retirement Wealth Trust

A longer name does not automatically make a trust invalid or unacceptable to a lender. The practical issue is that complicated names create more opportunities for abbreviations, spelling differences and inconsistent data entry.

For borrowers, that matters because a lender may need to reconcile information across the trust deed, trustee details, application and supporting documents.

For more golden tips on buying property or investing using a trust, check out the trust information page.

Trust Name Ideas And Examples

There is no single “best” trust name. The right choice depends on why the trust is being established and the advice you receive when the deed is prepared.

Some simple naming approaches include:

These are examples only. They do not determine the legal nature of the trust.

If your accountant or solicitor establishes a unit trust, discretionary trust, bare trust or another specific structure, make sure the formal name used across your documents is the name actually established under the deed.

What If I Have More Than One Trust?

You can use numbers to distinguish multiple trusts, but they are not the only option.

For example:

• Dawson Trust No. 1
• Dawson Trust No. 2
• Dawson Trust No. 3

may work perfectly well, but distinctive names can sometimes make administration easier when several entities are involved.

Alternatives could include:

• Dawson Family Trust
• Dawson Property Trust
• Dawson Investment Trust

There is no lending advantage in making one trust appear unrelated to another. If you are setting up multiple structures for asset protection, tax or estate-planning purposes, get appropriate legal and tax advice rather than relying on the naming convention itself.

Does A Trust Name Have To Be Unique?

Not in the same way as a registered company name.

A trust is not a company and is not registered on ASIC’s Companies Register simply because the trust has been established. This means two trusts can potentially have similar or identical names.

However, a reasonably distinctive name can still make administration easier.

This is particularly useful if you already have several companies or trusts with similar names.

Do not confuse the trust name with a company name or registered business name. Different registration and naming rules apply to those.

If a trust carries on a business under a name different from the trust’s own name, business-name registration requirements can also apply.

Read more about how to buy a property in a company name.

What Is The Difference Between A Trust Name And A Trustee Name?

The trust and its trustee are different parts of the structure.

This distinction becomes especially important when the trust applies for finance.

A lender needs to understand which entity is borrowing, which entity holds or will hold the property, which trust is involved and who may have to provide guarantees.

Does Putting Someone’s Name In The Trust Name Make Them A Beneficiary?

No. Calling a trust the Anderson Family Trust does not, by itself, make every member of the Anderson family a beneficiary.

Beneficiary rights are determined by the trust’s legal terms, including the trust deed.

The trust name is primarily an identifier. It should not be relied on to work out who the beneficiaries, trustees or controllers of the trust are.

Can The Name Of A Trust Affect A Home Loan Application?

A trust name can create administrative issues, but it is rarely the main reason a trust loan succeeds or fails.

When assessing a trust borrower, a lender may need to consider:

• The type of trust
• The trust deed and any amendments
• The trustee
• Directors of a corporate trustee
• Beneficiaries or unit holders where relevant
• Guarantee requirements
• The trustee’s power to borrow and provide security
• Income used for servicing
• The property being purchased
• The purpose of the loan
• The lender’s current policy for that type of trust

A well-chosen name cannot compensate for a trust structure the lender does not accept.

Likewise, an unusual trust name does not automatically mean the loan will be declined.

What Should You Avoid When Naming A Trust?

The best approach is generally to avoid names that introduce unnecessary complexity or create confusion about the trust, trustee or purpose of the structure.

Avoid Unnecessarily Complicated Names And Symbols

There is no general rule preventing a trust name from containing punctuation, numbers or symbols.

However, simple names tend to be easier to reproduce consistently across different documents and systems.

For example:

Anderson Property Trust

is easier to administer than:

10/22-24 George St Property & Investment Holding Trust

The issue is not that a slash, hyphen or other symbol automatically makes a trust unacceptable to a lender.

The practical concern is that a complicated name creates more opportunities for:

• Abbreviations
• Formatting differences
• Typing errors
• Inconsistent versions of the name across documents

From a lending-administration perspective, we generally prefer a simple formal name when there is no legal or structural reason to make it complicated.

Don’t Use Different Versions Of The Trust Name

Once the trust has been established, use its formal name consistently.

For example, if the trust deed states:

The Anderson Family Trust

avoid switching between:

• Anderson Family Trust
• Anderson Trust
• A. Family Trust
• The Anderson Property Trust

across your application and supporting documents.

A small formatting difference does not necessarily mean your loan will be declined, but inconsistencies may need to be clarified.

This can become particularly important where a lender is trying to match the trust deed to information about the trustee, borrower, bank accounts or other documents.

Don’t Confuse The Trust Name With The Corporate Trustee

If you use a corporate trustee, remember that you are naming two different things:

• The trust
• The company acting as trustee

For example:

Trust: Harris Family Trust

Trustee: Harris Holdings Pty Ltd

The corporate trustee is a registered company and is therefore subject to company-name rules that do not necessarily apply in the same way to the trust itself.

This distinction was unclear in older versions of this page and is worth making explicit.

Be Careful Using “Trust” Or “Trustee” In A Corporate Trustee Name

If you are setting up a company to act as trustee, do not assume that you can freely register words such as “Trust” or “Trustee” in the company’s name.

ASIC treats these as restricted words in company names, although approval may be available in certain circumstances.

That means a proposed company name such as:

Steven Harris Trustee Company Pty Ltd

should be checked before you rely on it.

This restriction concerns the company acting as trustee.

It does not mean you cannot call the trust itself something such as:

Harris Family Trust

Have the corporate trustee’s proposed name checked as part of setting up the structure.

Check Restricted Words When Naming A Corporate Trustee

Other words can also be restricted or require consent when registering a company.

Examples include terms such as:

• Trust
• Trustee
• Incorporated
• ANZAC
• Bank
• Banker
• Banking
• Building society

ASIC can also reject company names that improperly suggest connections with government, the Royal Family or particular regulated activities.

The exact rule depends on the word being used, so do not assume all restricted terms are treated identically.

Again, these rules relate to the company name, not a blanket prohibition on using those words in a trust name.

Think Carefully Before Using “Development”

Using “Development” in a trust name does not automatically make the trust ineligible for residential finance.

However, a name such as:

Anderson Property Development Trust

can raise an obvious question for the lender:

Is this trust buying an ordinary investment property, or is it undertaking property-development activity?

That distinction can matter because financing a:

• Completed residential investment property
• Vacant block intended for development
• Residential development
• Commercial development

can involve different lending policies and assessment requirements.

Our preference is not to describe “Development” as a word that automatically causes a decline. The more useful lending point is that the trust’s name and documents should not create unnecessary ambiguity about what the borrower is actually doing.

If development genuinely is the trust’s purpose, the application should accurately reflect that.

Avoid Naming The Trust Around One Property If Its Purpose May Change

A trust named:

22 Smith Street Property Trust

may be perfectly suitable if it is intended only to hold that particular asset.

However, consider what happens if the trust later holds another property or investment.

A more flexible name such as:

Anderson Property Trust

may make more sense over the longer term.

This is primarily an administrative consideration rather than a lending rule, but it is worth discussing when the structure is first established.

Avoid Names That Misrepresent What The Entity Does

Do not choose a name designed to make the trust appear to be a regulated institution, government organisation or other entity that it is not.

Banks also have obligations to identify their customers and understand the people and entities behind a trust.

These checks should not be confused with the idea that an unusual surname or a particular family name automatically causes a home-loan decline.

The important issue is whether the lender can satisfactorily identify the parties and complete its required compliance checks.

Should You Use Your Family Name In A Trust Name?

Yes. Family surnames are commonly used in trust names.

Examples include:

Anderson Family Trust

Anderson Property Trust

Anderson Investment Trust

Whether you actually want your surname in the name is a different question.

You may want to consider privacy, ease of identification and how the trust will be used over time.

Most importantly, using or avoiding your surname does not by itself determine whether the trust provides asset protection.

Asset protection depends on the legal structure and circumstances, not whether the trust is called Anderson Family Trust or Bluegum Trust.

Seek legal advice if asset protection is one of your reasons for establishing the trust.

Should I Put "Property" Or "Investment" In The Trust Name?

You can, but the wording does not determine how a lender assesses the transaction.

For example:

Anderson Property Trust

may make the trust’s intended purpose obvious to you and your advisers.

But a lender still looks at the actual transaction, deed and borrower structure.

Using the word “Property” does not automatically make something a residential property loan, just as using “Investment” does not determine the loan purpose.

If the trust may eventually hold different types of assets, a broader name may also be easier to retain.

Will Using "Development" In The Trust Name Stop Me Getting A Home Loan?

Not automatically.

A lender should assess what the trust is actually doing rather than classify the loan based on one word in its name.

However, if the trust name and supporting information suggest development or another business activity, the lender may need to clarify the transaction.

That matters because financing a standard residential investment property is assessed differently from financing development activity, commercial property, or land held for development.

The better approach is to explain the transaction accurately rather than trying to engineer the trust name around what you think a lender wants to see.

Does A Trust Name Provide Asset Protection?

No. A trust’s name does not create asset protection.

Changing:

Anderson Family Trust

to:

Bluegum Property Trust

does not, by itself, alter the underlying legal rights, ownership arrangements, guarantees or trust terms.

If asset protection is part of your strategy, that is a legal structuring question and should be discussed with your solicitor.

What If My Trust Already Exists?

Do not assume an existing trust has to be renamed or restructured before you apply for a loan.

A useful first step is to give your broker:

• The complete trust deed
• Any variations or amendments
• Trustee details
• Corporate-trustee details where applicable
• Beneficiary or unit-holder details where required
• The proposed property and loan amount
• Income and liability information for the relevant parties

Your broker can then investigate which lenders may work with the existing structure.

What Our Customers Ask Us About Trust Names

A useful pattern from recent Home Loan Experts enquiries is that borrowers frequently arrive after the trust has already been established.

The question is often not: “What should I name my trust?”

It is closer to: “Can I use the trust I already have without changing the trustees, directors or unit holders just to get finance?”

For example, we recently received enquiries involving an existing unit trust with multiple unit holders and an existing family trust being used in a more complicated property transaction.

In scenarios like these, the name itself is rarely the difficult part. The practical work is understanding the deed, the parties involved, the guarantees, the servicing, and which lenders will consider the structure.

That is why it makes sense to assess the existing arrangement before paying to change it purely for lending purposes.

Can You Change The Name Of A Trust?

Potentially, but the process depends on the trust deed and legal circumstances. Renaming a trust should not be treated like editing an account nickname. A change may need to be reflected across records held by your:

• Accountant
• Bank
• Lender
• Australian Business Register or ATO, where applicable
• Insurer
• Investment providers
• Other parties dealing with the trust

If there is already a mortgage or property held through the trust, speak with your solicitor and lender or broker before making the change.

The legal process for changing the trust name should be confirmed by your solicitor.

Is Changing The Trust Name The Same As Changing The Trustee?

No.

Changing the trust’s name and changing the trustee are different events.

A trustee is the person or company responsible for administering the trust and holding property or assets in its capacity as trustee.

Replacing that trustee may affect matters such as:

• Property records
• Loan documents
• Guarantees
• Bank accounts
• Company or trust documentation
• Existing lender arrangements

Do not treat a trustee change as simply correcting the name of the trust.

Where property or finance is already involved, obtain legal advice and tell your broker or lender before making the change.

Can I Apply For A Home Loan Before Setting Up The Trust?

You can investigate your borrowing position before the trust is established.

In fact, there can be value in doing so.

A preliminary lending assessment may help establish:

• Whether lenders consider the proposed trust type
• Which parties may need to be involved in the loan
• Who could be required to provide a guarantee
• What income the lender may assess
• What deposit may be required
• Whether the proposed property presents any lending issues
• Which trust documents will eventually be needed

The final credit or legal assessment may still require the completed trust deed.

A mortgage broker cannot decide which trust structure is right for your tax, legal, estate-planning or asset-protection objectives. Those decisions belong with your accountant and solicitor.

The broker can assess whether the structure being considered is workable from a lending perspective.

What Does A Lender Check In The Trust Deed?

The lender is generally trying to establish whether the proposed borrowing and security arrangements are permitted and whether the trust fits its credit policy.

Depending on the trust and lender, the review may include:

• Correct trust and trustee details
• Trustee borrowing powers
• Powers to mortgage or charge trust assets
• Trustee appointment provisions
• Beneficiary or unit-holder information where relevant
• Changes or amendments to the original deed
• Guarantee requirements
• Whether the parties to the loan match the legal structure

This is one reason the deed usually matters far more to the lending assessment than whether the trust has a particularly clever name.

What If The Trust Name Is Different Across My Documents?

Raise the discrepancy before lodging the loan application. The difference might be caused by:

• An abbreviation
• A spelling error
• An old trust name
• Different formatting
• A change of trustee
• An amended deed
• Outdated banking or accounting records

The lender may still need to establish that the documents relate to the same trust and legal arrangement.

Do not rewrite or alter legal documentation yourself simply to make the names match.

Give your broker and solicitor the existing documents and establish what, if anything, actually needs to be corrected.

Naming An SMSF Or Bare Trust

Be particularly careful applying general trust-naming advice to an SMSF property purchase.

An SMSF borrowing arrangement can involve several entities, potentially including:

• The SMSF
• The SMSF trustee
• A holding or bare trust
• A separate holding trustee

Each has a different role.

This is one area where trying to invent your own naming convention can cause unnecessary problems if it does not match the legal documents prepared for the borrowing structure.

Have the SMSF, holding trust and trustee details established and checked by the relevant legal, tax and superannuation professionals, and confirm the lending structure before entering a property contract.

Before You Finalise A Trust Name

If the trust could eventually borrow to purchase property, check more than the name.

Ask yourself whether your solicitor or accountant has confirmed the structure, whether the trust and corporate trustee are clearly distinguishable, whether the formal name can be used consistently and whether the deed provides the powers required for the intended transaction.

Then check the lending side.

You do not want to discover after signing a property contract that the legal structure you have established significantly limits your lender options.

Check The Lending Side Before You Finalise The Trust

Your solicitor and accountant can help determine how your trust should be legally established and whether it suits your tax and ownership objectives.

Home Loan Experts can assess the other side: whether lenders are likely to accept the proposed structure and what the finance application may require.

If you already have a trust, we can also assess the existing arrangement before you make changes purely for lending purposes.

Call 1300 889 743 or complete our free assessment to speak with a mortgage broker.