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Queensland Trust Law Changes:
New 125-Year Rule Explained

WILLS AND ESTATES

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Queensland has recently modernised key parts of its trust and property law in ways that can materially affect family trusts and estate planning.

From 1 August 2025, the Property Law Act 2023 (Qld) introduced a statutory perpetuity period of 125 years for trusts governed by Queensland law, unless the trust deed specifies a shorter period. This change replaces the previous position that, in practice, often limited trusts to an 80-year vesting period. The reform creates new opportunities for long-term, intergenerational planning, but it also introduces practical issues around tax, succession planning and trust governance that require careful attention.

If you have a family trust, discretionary trust or testamentary trust governed by Queensland law, these reforms may benefit your family. However, you should approach any changes cautiously and with specialist legal and taxation advice.

What Has Changed?

The Old Rules

Historically, most Queensland trusts were drafted to comply with an effective maximum perpetuity period of 80 years. This meant a trust needed to “vest” by its vesting date. When a trust vests, the trustee’s powers can narrow and the trust may need to move towards a wind-up process, depending on the trust deed.

For many families, an 80-year vesting horizon created real challenges. Trusts established decades ago can approach their vesting dates, which may force trustees to make decisions about transferring assets to beneficiaries, restructuring, or bringing the trust to an end. Those steps can have significant taxation and duty consequences and can also create governance and succession issues at an inconvenient time.

The New Rules

From 1 August 2025, the Property Law Act 2023 (Qld) abolishes the common law rule against perpetuities as it applies to trusts and replaces it with a statutory perpetuity period of 125 years, unless the trust deed specifies a shorter period.

In practical terms, the reform:

  • Increases the maximum perpetuity period available under Queensland law from 80 years to 125 years.
  • Applies automatically to many new trusts created from 1 August 2025
  • Allows many existing trusts to “opt in” to the new period, provided the change is implemented correctly and within time
  • Aligns Queensland more closely with a number of modern trust jurisdictions that allow longer perpetuity periods
  • Better reflects contemporary life expectancy and multigenerational planning needs

 

A 125-year period commonly spans four to five generations, which can allow families to preserve trust structures and planning flexibility for longer than previously possible.

Why This Matters for Your Family

Avoiding Premature Tax and Duty Consequences

As a trust approaches vesting and potential wind-up, trustees often need to consider capital gains tax and duty implications. Depending on the trust deed and the steps taken (for example, transfers of assets to beneficiaries, or beneficiaries becoming absolutely entitled to trust assets), capital gains tax events can arise and may result in significant tax outcomes.

Potential issues can include:

  • Capital gains tax: If trust assets such as real property, shares or managed investments have increased in value, certain transfers or vesting-related steps can trigger capital gains tax consequences.
  • Transfer duty: Transferring dutiable property (for example, real estate) from the trust to beneficiaries may attract transfer duty in Queensland, depending on the transaction.
  • Carried-forward losses: Carried-forward tax losses may become unusable if the trust is wound up or its structure changes, which can remove valuable future tax benefits.

 

The new 125-year perpetuity period can allow more time to plan, sequence and manage these issues, rather than being forced into decisions by an approaching vesting date.

Protecting Intergenerational Wealth

A longer perpetuity period can support long-term planning objectives, including:

  • Longer-term asset protection: Trust assets can remain within a protective structure for additional decades. That protection is not absolute, but it can help reduce exposure to risks such as beneficiary insolvency, poor financial decisions and, in some circumstances, relationship breakdowns, depending on who controls the trust and how it is administered.
 
  • Continued income distribution flexibility: Trustees can retain discretion to distribute income among family members over a longer period, subject to taxation rules and the trust deed.
 
  • Flexible succession planning: Families have more time to transition wealth gradually and
 
  • Support beneficiaries as their needs evolve over time.
 
  • Business continuity: Family businesses and commercial assets held in trust may continue to operate without forced transfers or restructuring solely because a vesting date is approaching.

Who Benefits from This Change?

The longer perpetuity period can be particularly relevant for:

  • Families with existing trusts approaching vesting: If your trust is due to vest within the next 10 to 20 years, extending the vesting date (where lawfully available) may help avoid premature asset transfers and provide more time for tax and succession planning.
  • Families establishing new trusts: New discretionary trusts, unit trusts and testamentary trusts created from 1 August 2025 can generally be drafted to take advantage of the longer Queensland perpetuity period from the outset.
  • Business-owning families: Families holding commercial property, trading businesses or investment portfolios in trust structures may benefit from extended planning flexibility and continuity.
  • Blended families: Longer planning horizons can help trustees provide for a current spouse while preserving outcomes for children from earlier relationships, where the trust deed is drafted appropriately.
  • Families with younger beneficiaries: Where grandchildren and great-grandchildren are beneficiaries, a longer perpetuity period may keep the structure effective across more of their lifetimes.

How to Take Advantage: What You Need to Do

For New Trusts

If you establish a trust after 1 August 2025 and it is governed by Queensland law, your lawyer can draft the trust deed to adopt the 125-year perpetuity period (or a shorter period if that better suits your objectives). Drafting should also address control, governance and succession issues to ensure the structure remains workable over the longer term.

For Existing Trusts

Existing trusts do not automatically gain an extra 45 years. Many existing trusts will need active steps to “opt in”, and those steps must be taken carefully.

Common pathways include:

  • Trustee power of variation: Many trust deeds give the trustee a power to amend the deed, sometimes including extending the vesting date. If the deed permits this and the power is exercised correctly, the trustee may be able to extend vesting and adopt the longer perpetuity period.

 

  • Consent of adult beneficiaries: In some circumstances, adult beneficiaries may be able to consent to amendments. This can be difficult for discretionary trusts with broad beneficiary classes and may not be practical.

 

  • Supreme Court involvement: If the deed does not permit amendment of the vesting date, and beneficiary consent is not feasible, it may be possible to apply to the Supreme Court of Queensland for orders permitting amendment. Whether this is appropriate depends on the trust, the beneficiaries and the court’s discretion.

 

  • Critical timing: Any extension of the vesting date generally needs to occur before the trust vests. Once a trust has vested and the wind-up process has commenced or been completed, the opportunity to extend the vesting date is usually lost.

Important Considerations and Risks

Taxation and Resettlement Risks

Changing a trust deed without proper legal authority, or making changes that go beyond the scope of the amendment power, can create serious risk. In some cases, an invalid or overly substantial variation can be treated as a new trust for taxation purposes, which can trigger outcomes similar to a wind-up, including capital gains tax consequences and potential loss of tax attributes.

You should only vary a trust deed with proper legal and taxation advice to ensure the variation is valid, properly executed and does not create unintended outcomes.

Queensland Connection and Governing Law

A Queensland governing law clause is important, but in some situations the trust’s real connection may also be relevant, including where the trust is administered and where key parties and assets are located.

If you are considering changing a trust’s governing law to Queensland to access the 125-year perpetuity period, you should obtain specialist advice on the correct approach, including whether the trust’s administration, trustee arrangements and asset holdings support the desired outcome.

Transfer Duty Considerations

Changing trustee arrangements, transferring trust assets, or restructuring to create stronger Queensland connections can have transfer duty implications. Queensland’s duty provisions can be complex and some trust-related transactions may attract duty depending on the circumstances.

You should discuss duty risk as part of any proposal to amend a trust, change trustees or restructure assets.

Succession Planning and Governance

Extending a trust’s life makes governance even more important. Longer-term trusts require clear succession and control planning, including:
• Appointor and guardian succession and whether those roles remain workable over decades
• Trustee succession and corporate trustee governance
• Record-keeping and decision-making processes that future trustees can understand and follow
• Periodic deed reviews to ensure the trust remains aligned with the family’s objectives and the legal environment

Practical Steps to Take Now

If your trust is governed by Queensland law, or you are considering whether it should be, practical next steps include:

 

  1. Review your trust deed: Obtain the executed deed and any variations. Confirm the current vesting date and the amendment power.

 

  1. Identify timing risk: If vesting is scheduled within the next 10 to 20 years, consider whether extension is desirable and feasible.

 

  1. Confirm the trust’s administration and connections: Consider where the trustee operates, where the trust is administered and where assets are located.

 

  1. Obtain specialist advice: Trust amendments can be high risk if done incorrectly. Obtain legal and taxation advice before taking steps.

 

  1. Model tax and duty outcomes: Your accountant should model possible vesting and restructure outcomes to support informed decision-making.

 

  1. Update succession and governance documents: If the trust will run for longer, ensure appointor, trustee and control succession are documented and workable.

 

  1. Document decisions: Maintain clear records of trustee decisions, advice received and reasons for changes. Proper documentation reduces disputes and assists future trustees.

Disclaimer
The contents of this article are considered accurate as at the date of publication. The information contained in this article does not constitute legal advice. Readers should seek legal advice about their specific circumstances. 

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Frequently asked questions

Not necessarily. Many existing trusts will not automatically gain extra time. In many cases, the trust deed must be lawfully amended to extend the vesting date and “opt in” to the longer perpetuity period. Whether that is possible depends on the deed and the available legal pathways. Any change should be implemented before the trust vests.

Once a trust has vested, options to extend the vesting date are usually lost. Trustees may need to take wind-up steps required by the deed, which can involve transfers of assets and may have capital gains tax and transfer duty consequences, depending on the circumstances.

Possibly, but it is complex and high risk if done incorrectly. A governing law clause alone may not be sufficient in all circumstances. You may need genuine Queensland administration and other supporting factors. You should obtain specialist legal and taxation advice before attempting any change to governing law or trust administration.

Costs vary significantly depending on the trust deed, the amendment power, the parties involved and whether court involvement is required. Any figures should be treated as indicative only and confirmed after a proper review of the trust deed and your circumstances.

Rushed decisions increase the risk of mistakes.

Our estate planning team at HQF Lawyers advises on trust deeds, variations, succession planning and long-term governance. We can review your deed, confirm your vesting date and advise on whether extending the trust period is feasible and appropriate for your family.
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