{"id":18807,"date":"2026-10-21T14:22:56","date_gmt":"2026-10-21T03:22:56","guid":{"rendered":"https:\/\/chuatan.com.au\/?p=18807"},"modified":"2026-10-21T14:22:56","modified_gmt":"2026-10-21T03:22:56","slug":"deed-of-family-arrangement-make-family-agreement-binding","status":"publish","type":"post","link":"https:\/\/chuatan.com.au\/en\/deed-of-family-arrangement-make-family-agreement-binding\/","title":{"rendered":"Deed of Family Arrangement: How to Make a Family Agreement Binding"},"content":{"rendered":"<div class=\"ct-article\" data-no-translation>\n<p>Your family has agreed on something important. Perhaps the eldest daughter will chair the board, a sibling who leaves the business will be bought out at a fair price, or no shares will pass to in-laws. Everyone nodded at the family meeting. The question now is how to make that promise hold when memories fade, circumstances change or someone has second thoughts.<\/p>\n<p>A family constitution or charter is usually not the answer on its own. As we explain in our article on whether family agreements are binding, most family charters are deliberately non-binding. The promises that need legal force must be carried into documents the law recognises: &#8220;bridging&#8221; documents that connect the family&#8217;s intentions to the legal structures that actually hold the power.<\/p>\n<p>This article sets out those documents, what each can and cannot do, and which suits which kind of promise.<\/p>\n\n<h2>1. Deeds: deeds of family arrangement and family undertakings<\/h2>\n<p>A deed is a formal written document that is binding on the people who sign it. Unlike an ordinary contract, it does not need each side to give something in return, which makes it well suited to promises between family members.<\/p>\n<h3>Deed of family arrangement after a death<\/h3>\n<p>In the estates context, a deed of family arrangement is an agreement among the beneficiaries of an estate to vary how the estate is distributed, for example to give a surviving parent the family home outright, or to resolve a dispute without going to court. It needs the agreement of all affected beneficiaries. Tax and duty consequences should be checked with the accountant.<\/p>\n<h3>Lifetime family deeds and undertakings<\/h3>\n<p>During their lifetimes, families use deeds to record how a family property will be used and sold, a child&#8217;s promise to repay advances, or that a property in one person&#8217;s name is held for the family.<\/p>\n<p><strong>Best for:<\/strong> specific promises between named individuals, especially about particular assets or money. <strong>Limits:<\/strong> a deed binds only those who sign it, and cannot override the powers of a trustee or company board unless those bodies are parties and the documents allow it.<\/p>\n\n<h2>2. Shareholders&#8217; and unitholders&#8217; agreements<\/h2>\n<p>Where the family business is run through a company, a shareholders&#8217; agreement is usually the main tool for giving family rules legal effect. Where it is run through a unit trust, the equivalent is a unitholders&#8217; agreement. Typical clauses deal with:<\/p>\n<ul>\n<li>who may hold shares or units (for example, only lineal descendants or family trusts);<\/li>\n<li>pre-emptive rights, so that a member who wants to sell must offer to the family first;<\/li>\n<li>how the price is set on exit, often by an independent valuer using an agreed method;<\/li>\n<li>what happens on death, incapacity, bankruptcy or relationship breakdown, including compulsory transfer options;<\/li>\n<li>who may appoint directors, and which decisions need a special majority or unanimous approval;<\/li>\n<\/ul>\n<p><strong>Best for:<\/strong> ownership, exit, liquidity and decision-making rights. <strong>Limits:<\/strong> only binds the parties who sign. New shareholders must sign a deed of accession, and the agreement must be consistent with the company constitution.<\/p>\n\n<h2>3. Amending the company constitution<\/h2>\n<p>Under the Corporations Act 2001 (Cth), a company&#8217;s constitution and any applicable replaceable rules operate as a contract between the company and each member, between the company and its directors and secretary, and between the members themselves. A company may change its constitution by special resolution of its members, which requires at least 75% of the votes cast. The constitution may also add further requirements before an amendment takes effect, which is a useful way of entrenching key family protections.<\/p>\n<p>Because the constitution automatically binds every current and future shareholder, it is the right place for rules that must survive changes in ownership: share classes with different voting and dividend rights, restrictions on transfer, the number of directors each family branch may appoint, and reserved matters that need shareholder approval.<\/p>\n<p><strong>Best for:<\/strong> rules that must bind all members, now and in future. <strong>Limits:<\/strong> every member, including future ones, is entitled to see the constitution, and changing it needs a special resolution, so sensitive or personal arrangements are often better placed in a separate shareholders&#8217; agreement.<\/p>\n\n<h2>4. Amending the trust deed<\/h2>\n<p>Many family groups hold their wealth through a discretionary (family) trust. The trust deed sets out who controls the trust: the trustee, and usually an appointor or guardian with power to remove and replace the trustee. Family rules about succession of control belong here, for example who becomes appointor if the founder dies, or a requirement that two appointors act jointly.<\/p>\n<p>A trust deed can usually be changed only in the way its own variation clause allows, and some parts may not be changeable at all. A poorly planned variation can also have tax or stamp duty consequences.<\/p>\n<p><strong>Best for:<\/strong> who controls the trust and how control passes. <strong>Limits:<\/strong> depends on the variation power. A letter of wishes to the trustee remains guidance only.<\/p>\n\n<h2>5. Policies adopted by the board<\/h2>\n<p>Some family rules concern how the business runs day to day: employment of family members, pay, use of company assets, conflicts of interest, and dividend policy. These are often best adopted by formal board resolution as company policy.<\/p>\n<p><strong>Best for:<\/strong> operational rules that may need to evolve. <strong>Limits:<\/strong> the board can change them by later resolution, so rules that must be protected belong in the constitution or shareholders&#8217; agreement.<\/p>\n\n<h2>6. Wills, powers of attorney and binding nominations<\/h2>\n<p>Promises about what happens on death must be reflected in each family member&#8217;s estate documents:<\/p>\n<ul>\n<li><strong>Wills<\/strong> deal with shares and units held personally, and can create testamentary trusts for the next generation.<\/li>\n<li><strong>Enduring powers of attorney<\/strong> decide who manages a person&#8217;s personal assets, including shares, if they lose capacity.<\/li>\n<li><strong>Binding death benefit nominations<\/strong> direct the superannuation trustee. Superannuation does not automatically form part of the estate, so a Will alone does not control it. For many public funds, a binding nomination lapses after three years unless renewed or the fund allows non-lapsing nominations; for self-managed funds, it depends on the fund&#8217;s deed.<\/li>\n<\/ul>\n\n<h2>Which document suits which promise?<\/h2>\n<ul>\n<li><strong>&#8220;Only family may own the business&#8221;<\/strong>: company constitution, plus shareholders&#8217; agreement.<\/li>\n<li><strong>&#8220;A sibling who leaves will be bought out fairly&#8221;<\/strong>: shareholders&#8217; or unitholders&#8217; agreement, with a valuation method and funding plan.<\/li>\n<li><strong>&#8220;Control of the family trust passes to both children jointly&#8221;<\/strong>: trust deed amendment to the appointor provisions, plus aligned Wills.<\/li>\n<li><strong>&#8220;Mum keeps the house after Dad dies&#8221;<\/strong>: Wills, or a deed of family arrangement after death.<\/li>\n<\/ul>\n\n<h2>Practical steps<\/h2>\n<ol>\n<li>Gather all existing documents: trust deeds and variations, company constitutions, shareholders&#8217; agreements, Wills, powers of attorney and super nominations, including those made overseas.<\/li>\n<li>List the family promises that need legal force.<\/li>\n<li>Map each promise to the document that controls that issue.<\/li>\n<li>Check for conflict between documents and resolve it before adding anything new.<\/li>\n<li>Have the tax and stamp duty effects reviewed by the accountant before signing.<\/li>\n<li>Sign with the correct formalities. For family members overseas, arrange witnessing or notarisation that will be accepted.<\/li>\n<\/ol>\n\n<h2>Frequently asked questions<\/h2>\n<h3>What is a deed of family arrangement?<\/h3>\n<p>In estates, it is a deed in which all affected beneficiaries agree to distribute an estate differently from the Will or intestacy rules. More broadly, families use deeds to record binding promises between members. Tax and duty consequences should be checked before signing.<\/p>\n<h3>How do I make a family agreement binding?<\/h3>\n<p>Place each important promise into the document that legally controls that issue: a deed, shareholders&#8217; or unitholders&#8217; agreement, the company constitution, the trust deed, a board policy or a Will. A family charter alone rarely achieves it.<\/p>\n<h3>Does a shareholders&#8217; agreement override the company constitution?<\/h3>\n<p>Not automatically. The two should be drafted to work together. Many shareholders&#8217; agreements require the parties to vote to amend the constitution if there is inconsistency, but the safest course is to align them from the start.<\/p>\n\n<h2>How Chua Tan Associates can help<\/h2>\n<p>We help families turn the important parts of their family agreements into documents that work: deeds of family arrangement, shareholders&#8217; and unitholders&#8217; agreements, constitution and trust deed amendments, board policies, Wills and powers of attorney, all checked against each other so they do not conflict. Justin Chua is a Nationally Accredited Mediator and an Accredited Family Business Advisor who trained in accounting, and we work alongside the family&#8217;s accountant on tax and duty. The firm has a notary public for documents signed or used overseas, works with local lawyers in other countries, and advises in English, Mandarin and Cantonese.<\/p>\n<h2>Related reading<\/h2>\n<ul class=\"ct-related\"><li><a href=\"\/en\/is-a-family-constitution-legally-binding\/\">Is a Family Constitution Legally Binding? Wishes vs Rules<\/a><\/li><li><a href=\"\/en\/shareholders-agreement-family-business-australia\/\">Shareholders Agreement for a Family Business in Australia<\/a><\/li><li><a href=\"\/en\/who-controls-family-trust-after-death-mapping-control\/\">Who Controls a Family Trust After Death? Mapping Your Family Group<\/a><\/li><\/ul>\n<p><em>Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an <a href=\"#ct-enquiry\">enquiry<\/a>. Advice is available in English, Mandarin and Cantonese.<\/em><\/p>\n<p class=\"ct-byline\"><em><a href=\"\/en\/justin-chua\/\">Justin Chua<\/a> (\u8521\u667a\u52cb), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.<\/em><\/p>\n<\/div>\n\n\n<div id=\"ct-enquiry\" class=\"ct-eq\" data-no-translation>\r\n<style>.ct-eq{background:#f4f1ea;border:1px solid #e3ddd0;border-radius:10px;padding:22px 24px;margin:32px 0;font-size:16px;line-height:1.6}.ct-eq h2,.ct-eq h3{margin:0 0 6px}.ct-eq p{margin:0 0 12px}.ct-eq form{display:grid;grid-template-columns:1fr 1fr;gap:12px}.ct-eq label{display:block;font-size:14px;font-weight:600;margin-bottom:4px}.ct-eq input,.ct-eq select,.ct-eq textarea{width:100%;box-sizing:border-box;padding:10px 12px;border:1px solid #cfc6b4;border-radius:6px;font-size:16px;background:#fff}.ct-eq .full{grid-column:1\/-1}.ct-eq button{background:#8a6a3b;color:#fff;border:0;border-radius:6px;padding:12px 22px;font-size:16px;cursor:pointer}.ct-eq .hp{position:absolute;left:-9999px}.ct-eq small{color:#5f5a50}.ct-eq .ok{background:#e7f3e8;border-left:4px solid #3c8d40;padding:12px 16px}.ct-eq .bad{background:#fbeaea;border-left:4px solid #b03a2e;padding:12px 16px}.ct-eq .ct-direct{display:flex;flex-wrap:wrap;gap:10px;margin-top:14px}.ct-eq .ct-direct a,.ct-eq .ct-direct button{background:#fff;color:#2b2b2b;border:1px solid #cfc6b4;padding:9px 14px;border-radius:6px;text-decoration:none;font-size:15px}@media(max-width:640px){.ct-eq form{grid-template-columns:1fr}}<\/style>\r\n<h3>Tell us about the estate<\/h3>\r\n<p>A short message is enough. We reply in English, Mandarin or Cantonese, and quote fees in writing before any work starts.<\/p>\r\n<form method=\"post\" action=\"https:\/\/chuatan.com.au\/wp-admin\/admin-post.php\">\r\n<input type=\"hidden\" name=\"action\" value=\"ct_estate_enquiry\">\r\n<input type=\"hidden\" name=\"ct_ts\" value=\"1792600013\">\r\n<input type=\"hidden\" name=\"ct_lang\" value=\"en\">\r\n<input type=\"hidden\" name=\"ct_page\" value=\"https:\/\/chuatan.com.au\/en\/deed-of-family-arrangement-make-family-agreement-binding\/\">\r\n<div class=\"hp\" aria-hidden=\"true\"><label>Website<input type=\"text\" name=\"ct_website\" tabindex=\"-1\" autocomplete=\"off\"><\/label><\/div>\r\n<div><label for=\"ct_name\">Your name *<\/label><input id=\"ct_name\" name=\"ct_name\" required maxlength=\"120\"><\/div>\r\n<div><label for=\"ct_email\">Email<\/label><input id=\"ct_email\" name=\"ct_email\" type=\"email\" maxlength=\"160\"><\/div>\r\n<div><label for=\"ct_phone\">Phone, WeChat or WhatsApp<\/label><input id=\"ct_phone\" name=\"ct_phone\" maxlength=\"80\"><\/div>\r\n<div><label for=\"ct_language\">Preferred language<\/label><select id=\"ct_language\" name=\"ct_language\"><option>English<\/option><option>Mandarin<\/option><option>Cantonese<\/option><\/select><\/div>\r\n<div><label for=\"ct_type\">What do you need help with?<\/label><select id=\"ct_type\" name=\"ct_type\"><option value=\"\">Please choose<\/option><option>Someone has died and there is a Will<\/option><option>Someone has died and there is no Will<\/option><option>Someone has died and I am not sure if there is a Will<\/option><option>Making or updating a Will or estate plan<\/option><option>Executor or trustee question<\/option><option>A dispute about an estate<\/option><option>Other<\/option><\/select><\/div>\r\n<div><label for=\"ct_state\">Where are the assets?<\/label><select id=\"ct_state\" name=\"ct_state\"><option value=\"\">Please choose<\/option><option>Victoria<\/option><option>New South Wales<\/option><option>Queensland<\/option><option>Western Australia<\/option><option>South Australia<\/option><option>Tasmania<\/option><option>ACT<\/option><option>Northern Territory<\/option><option>More than one state<\/option><option>Overseas as well<\/option><option>Not sure<\/option><\/select><\/div>\r\n<div class=\"full\"><label for=\"ct_time\">Best time to contact you (optional)<\/label><input id=\"ct_time\" name=\"ct_time\" maxlength=\"120\"><\/div>\r\n<div class=\"full\"><label for=\"ct_msg\">Brief details (optional)<\/label><textarea id=\"ct_msg\" name=\"ct_msg\" rows=\"4\" maxlength=\"3000\"><\/textarea><\/div>\r\n<div class=\"full\"><button type=\"submit\">Send enquiry<\/button><br><small>We use your details only to respond to your enquiry. Sending this form does not create a lawyer\u2013client relationship. <a href=\"\/privacy-policy\/\">Privacy<\/a><\/small><\/div>\r\n<\/form>\r\n<div class=\"ct-direct\"><strong style=\"width:100%\">Or contact us directly<\/strong>\r\n<a href=\"tel:+61396023988\">Call +61 3 9602 3988<\/a>\r\n<a href=\"mailto:chuatan@tpg.com.au\">chuatan@tpg.com.au<\/a>\r\n<a href=\"https:\/\/wa.me\/61490369102\" target=\"_blank\" rel=\"noopener\">WhatsApp +61 490 369 102<\/a>\r\n<button type=\"button\" class=\"ct-wechat\" data-msg=\"WeChat ID copied\">WeChat: chuatan262<\/button>\r\n<\/div>\r\n<\/div>\r\n\t\n\n<div class=\"ct-guides\" data-no-translation><style>.ct-guides{margin:28px 0}.ct-guides ul{display:grid;grid-template-columns:repeat(auto-fit,minmax(230px,1fr));gap:10px;list-style:none;padding:0;margin:10px 0 0}.ct-guides li{margin:0}.ct-guides a{display:block;padding:12px 14px;border:1px solid #e3ddd0;border-radius:6px;text-decoration:none;background:#fff;height:100%}<\/style><h3>Estate guides<\/h3><ul><li><a href=\"\/en\/do-i-need-probate\/\">Do I need probate? 2-minute check<\/a><\/li><li><a href=\"\/en\/what-to-do-when-someone-dies\/\">What to do when someone dies: 30-day checklist<\/a><\/li><li><a href=\"\/en\/letters-of-administration-victoria\/\">No Will? Letters of administration and who inherits<\/a><\/li><li><a href=\"\/en\/estate-planning-victoria\/\">Estate planning: Will, power of attorney, medical decisions<\/a><\/li><li><a href=\"\/en\/testamentary-trusts\/\">Testamentary trusts<\/a><\/li><li><a href=\"\/en\/superannuation-and-your-will\/\">Superannuation and your Will<\/a><\/li><li><a href=\"\/en\/executor-disputes\/\">Executor problems and disputes<\/a><\/li><li><a href=\"\/en\/professional-executor-trustee\/\">Professional executor &amp; trustee services<\/a><\/li><li><a href=\"\/en\/%E5%AE%A2%E6%88%B7%E8%AF%84%E4%BB%B7\/\">Client reviews<\/a><\/li><\/ul><\/div>","protected":false},"excerpt":{"rendered":"<p>Your family has agreed on something important. Perhaps  [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_meta-robots-noindex":"","_wpcom_ai_launchpad_first_post":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,19],"tags":[],"class_list":["post-18807","post","type-post","status-publish","format-standard","hentry","category-25","category-19"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.2 (Yoast SEO v28.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Deed of Family Arrangement: How to Make a Family Agreement Binding | Chua Tan Associates<\/title>\n<meta name=\"description\" content=\"How to make a family agreement binding in Australia: deeds of family arrangement, shareholders&#039; 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