Trust distribution minutes and AI confidentiality: what a trustee resolution gives away in ChatGPT or Claude.

Every year an accounting firm prepares trustee resolutions for its trust clients, and the quickest way to do it is to take last year’s minute and ask ChatGPT or Claude to roll it forward. That minute names the trustee, every beneficiary, how much each is to receive, where the money will go and why the trustee chose those amounts. This page marks every item in a family trust distribution minute that APES 110, the TPB Code and the Privacy Act bear on, notes where section 100A and Division 7A come in, and shows how the roll-forward runs on Ermos inside the practice.

The trust distribution minute

Prepared before the end of the income year for each discretionary trust client. The trust deed sets when a resolution must be made, and many deeds require it by 30 June, so the minute is also evidence of what was decided and when.

An invented minute. The ABN is the ATO’s published example value. Hover or tap any highlighted item for the analysis; the full list is below.

What leaves the firm

1. 1
   The trust, the trustee and its ABN

   Names the family trust and the company acting as its trustee. The ABN is public, but beside the rest of the minute it ties every amount to one family. APES 110 confidentiality guide.

2. 2
   The net income

   The trust’s income for the year and where it came from. Confidential financial information acquired in the professional relationship under APES 110 R114.2. APES 110 confidentiality guide.

3. 3
   Who receives how much

   Each beneficiary’s name and entitlement. The core of the minute and personal information about three individuals, plus a company’s entitlement. The ATO’s trust guidance lists trustee resolutions among the records to keep, because they show what was decided. Privacy Act guide.

4. 4
   An elderly beneficiary and where his money goes

   His age, the power of attorney and how the entitlement will be applied. Section 100A of the Income Tax Assessment Act 1936 looks at whether someone other than the presently entitled beneficiary received a benefit, so where the money ends up is the fact that matters, and a person has to judge it. Privacy Act guide.

5. 5
   An unpaid company entitlement

   A company beneficiary whose entitlement is left with the trustee. After the High Court’s decision in Bendel in June 2026, the ATO says no Division 7A loan arises where a private company beneficiary does nothing about its entitlement. Dealing with those funds for a shareholder or associate can still bring in the unpaid present entitlement rules in Subdivision EA, and where the entitlement arose from a reimbursement agreement section 100A can apply. The ATO was reviewing its guidance as at 1 July 2026, so a draft that relies on an older view needs checking by a person. TPB Code guide.

6. 6
   The stated reasons

   Why the trustee chose these amounts, in the trustee’s words. Section 100A turns on whether an arrangement was entered into for a purpose of reducing tax, and ATO guidance (PCG 2022/2) sets out how it assesses risk, so what a minute says about purpose is part of the record. TPB Code guide.

7. 7
   The deed and the variation

   The clause the trustee relies on and the date of the deed and its variation. Identifies the document and shows what powers the trustee has. APES 110 confidentiality guide.

8. 8
   When, where and by whom the resolution was made

   A date, a home address and two signatories. Whether the resolution was made in time is for the deed and the law, so the date is evidence a firm needs to get right and cannot leave to a draft. Privacy Act guide.

9. 9
   The preparer

   Ties the minute to the practitioner who prepared it and makes any leak traceable to the practice. TPB Code guide.

10. 10
    The opening resolution wording

    Standard words found in any trustee minute, with no client data in them.

What happens in Frontier Models (ChatGPT, Claude)

• The whole document is transmitted to the provider’s servers. On personal plans the user cannot choose where it is stored or processed, and for the major providers that has generally meant outside Australia, under that country’s legal process. Some business plans offer storage in Australia, but the provider still receives the content.
• On consumer tiers, prompts can be retained and used to train future models.
• The provider’s staff and systems can reach the content under the provider’s own policies.
• Once sent, the firm no longer controls it. Retention and deletion happen on the provider’s terms.

The same document on Ermos

Part of AI data leakage in accounting firms. See how this works in practice: Tax work on Ermos.

Common questions