Ai Tools for Accountants #3 – Simple Trust Resolution Drafter

Trusts and trust income resolutions have always been of great interest to the ATO. Yet now, with cases such as Owies v JJE Nominees Pty Ltd (2022) VSCA 142, trustees must also keep an eye out for disgruntled groups of potential beneficiaries when drafting trust income resolutions. A two-fronted attack on your client’s trust wealth.

In this environment of heightened risk for trustees, imagine an Ai driven trust resolution drafting tool that works with the trust Deed and trustee/adviser inputs to produce a tailored draft resolution in a matter of seconds. Even better, this drafting tool serves up a list of implications/warnings that stem from the resolution just drafted! At Elfworks, we built such a tool. This is how we went about it.

A word on Privacy

Our Simple Trust Resolution Drafter involves the review of a client trust Deed by an Ai model. We have opted-out of storage and data-training with our enterprise subscriptions to Ai models, meaning the client Deed is not stored or used for training the model post analysis; the data (or in this case, the loaded version of the Deed) is deleted with only the Deed analysis remaining.

What is required when documenting a valid trust resolution?

In general, a valid trust resolution must adhere to the relevant rules set out in the trust Deed. It should also be drafted in a manner that meets ATO standards for valid resolutions. The constant refrain of “Read the Deed” in trust affairs is paramount when drafting a trust resolution as a valid resolution must exhibit the following:

• Comply with the trust Deed: the terms of the specific Deed must be known before drafting the resolution, as key terms such as ‘trust income’ and classes of beneficiaries must be known 

• Correct timing of the resolution: Most Deeds work off 30 June, some work off the last business day of the year.  Other Deeds may have either of the above, with additional requirements particular to that Deed

• Clear and specific language: Ambiguity can void a trust resolution

• Establish a present entitlement to income: This is the main purpose of the trust income resolution.

Once a resolution is made by the trustee(s), this must confer to the beneficiaries a present entitlement to a share of trust income.

Recitals are key elements of a valid trust resolution as these introductory statements provide context and clarify the trustees intention when making the resolution. To write valid recitals, you must READ THE DEED; as recitals take their cue from the terms of the particular Deed. Ai excels at reading new Deeds and crafting these recitals (with the right prompts).

If firms use a standard format for trust resolutions across numerous trust clients with different Deeds, there is a significant risk of drafting invalid resolutions as the features of the resolution minute may differ from the requirements of the trust Deed.

Implications of the trust resolution

As well as drafting a minute that meets the Deed and ATO requirements for a valid resolution, the Simple Trust Resolution Drafter also produces a document that sets-out the implications arising from the resolution just drafted. For example, if income is distributed to a bucket company in the resolution, the Implications document provides a warning on the ATO view on UPE’s to company beneficiaries (the Bendel mess and TD 2022/11). When individual beneficiaries are named, the Implications document warns of the need to consider other potential beneficiaries for distributions (per Owies v JJE Nominees). This document also explains what sections to fill-out in the individual return or company returns for beneficiaries named in the resolution.

Which Ai model to use?

After testing various models and various prompts, we landed on Grok 3 to convert Deeds to a readable form and Gemini 2.5 running as the engine to produce the income resolution minute and Implications document.

How long does the Simple Trust Resolution Drafter take?

Assuming you have a readable trust Deed and the relevant inputs ready (estimate of trust taxable and accounting income and planned distributions), the relevant input ready (e.g., description of the service, details of the equipment or property being provided) the Bot will draft a trust income resolution minute and implications document in around 45 seconds. If the Deed is stored as images, added another 60 seconds to upload and convert this to a readable form.

If you would like full, free, no obligation trial of an Ai platform designed from the bottom-up for Australian accountants with a Simple Trust Resolution Drafting tool (and dozens of others), please contact us at info@elfworks.ai.

Thank you for reading. Next blog I’ll take a look at Ai Tools for Accountants #4 – Group Structure Builder.

Please click here for Elfworks pricing information.