Hybrid Trust Set up Steps:

1. Ensure you have consent and all the personal details for the Trustee/s, Unit holders and Beneficiaries,
2. Decide on the type of trustee/s (company or individual),
3. Decide on the class and value of the units for each Unit holders,
4. Once you have all of the above requirements in order, you are ready to apply!

Setting up a Hybrid Trust
A Hybrid Trust is a combination of both a Discretionary Trust and a Unit Trust.

Within a Hybrid Trust, the trustee is given the power to distribute trust income and capital among a nominated class of beneficiaries (similar to a Discretionary/Family Trust). The income and capital is distributed part in a proportional method (like a Unit Trust) relative to the number of units held by each beneficiary and part in a discretionary method.

The Hybrid Trust has several unique features:

• The beneficiaries hold their respective interests within a defined set of classes from ordinary units to a range of special classes of units each class having its own “terms of reference”.
• The various classes have fixed entitlements within each class so that a group of say special “A” class unit holders will have a fixed entitlement to any profit distribution which the trustee decides to pay that class.
• The fixed entitlement operates in a similar way to the unit trust but applies only to the money that is directed to that particular class.
• The Trustee has complete discretion to distribute profit to any class of unit holders, but once the decision is made to distribute to a particular class or classes of unit holders then the entitlements are fixed within that class, the trustee having no discretion within that class of unit holders.
• The Hybrid Trust enables the trustee to pay money to certain classes and therefore obviously not to pay money to other classes of unit holders.
• The Trustee can issue additional units that have different “terms of issue”.