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Register The Deeds - Losing original deeds can be costly |
Original trust deeds are very important documents, evidence of the existence of a trust which has the potential to be around for 80 years. Registering deeds with the Department of Lands could be a very good investment. In the absence of evidence that original trust deeds were stamped with duty, you could find yourself with a hefty bill to pay. |
Consider the case of a couple who set up a trust which was established before it owned any property, other than the settlement sum of $10. The deed was sent to the Office of State Revenue and it was stamped with duty of $200. |
When the couple were refinancing the trust's loans some years later, their new bank required a certified copy of the original deed. By then the trust owned property with a market value of $1,000,000 and listed shares with a market value of $500,000. However, the original trust deeds could not be found and no certified copy had been made. |
In the absence of evidence confirming that the original trust deed was stamped, stamp duty of $40,490 will have to be paid on the $1 million worth of real estate in the trust. The property will also have to be valued. (Fortunately, as listed shares are now exempt, duty will not have to be paid on the value of the shares owned by the trust.) |
If the original trust deed had been registered with the Department of Lands after it was signed and stamped, a copy of the deed could have been obtained from Land and Property Information. This would be as good as having the original and would have avoided the problem. |
During the life of a trust, it is probable that the family members controlling the trust and the trust's accountant, lawyer and banker will all change, possibly more than once. Any one of these changes could result in an original trust deed being misplaced. The document could also be destroyed by fire or flood. |
The only disadvantages of registration are that the document becomes a document on the public record and that it costs money to register the deed. The cost and disadvantages of not registering can be significant if the original is ever lost or destroyed. |
As well as the stamp duty consequences, there can also be unwanted tax consequences. |
