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Beneficiaries have rights stemming from the trust deed, equity and statute. A beneficiary of a fixed trust (including a ‘unit trust’) is entitled to a fixed proportion of the trust income and capital distributed to the beneficiaries in any given year, and therefore the beneficiary’s interest is proprietary in nature. The beneficiaries of a discretionary trust cannot claim to be entitled to any specific part or percentage of the assets or fund of the trust. The beneficiaries’ rights to that fund, whether capital or income, are subject to the exercise by the trustee of his or her discretion on how the fund is to be allocated or divided among the objects. Thus a beneficiary of a discretionary trust of income does not have any proprietary interest in the subject matter of the trust. The only right of a beneficiary of a discretionary trust of income is a right to require the trustees to consider whether or not to exercise their discretion. A qualified Asset Protection and Trusts Lawyer in our practice may be able to consider your factual matrix and provide you with advice if you are a beneficiary to a trust.

Beneficiaries have general rights that have developed from common law and are partially codified in statute law. These rights are detailed and include the right to inspect documents of the trust and to seek and obtain information from the trustee. Where a trustee has no active duties to perform and the beneficiary is sui juris and absolutely entitled, the beneficiary is entitled to possession of the trust property and to the indicia of title to the trust property. The beneficiaries, or any one of them, may institute proceedings to compel the performance of the trustee's duty or to protect their beneficial interest in the trust property. A failure by the trustee to carry out any particular duty will, of course, be a breach of trust, giving rise to a right of action by a beneficiary and, if sufficiently serious, will afford grounds for the removal of the trustee and the appointment of a new trustee. An Asset Protection and Trusts Lawyer may be able to review and consider your situation and provide advice in this regard.

Where trustees are intending to perform an act which would constitute a breach of trust, the beneficiary has the right to seek an injunction restraining them, even though the consequences of the proposed act may not be reversible. This remedy is sought in a court of equity, which means it is sought in the Supreme Court because it has equitable jurisdiction. The only remedy available to a beneficiary is equitable and the right to an injunction can be defeated only if the defendant can show one of the traditional equitable defences such as laches or unclean hands. A beneficiary may also seek a court order to appoint a receiver of a trust where there is refusal by one or more of the trustees to act and there is consent from the beneficiaries. This is only available where the appointment is required for the safety of the trust property, the basis of the jurisdiction being the jeopardy of that property, as generally courts are reluctant to intervene in trust relationships. An Asset Protection and Trusts Solicitor may be able to ensure your interests are protected as a beneficiary.

If you require assistance with an equity matter, you may wish to contact our firm and make an appointment to see one of our Asset Protection and Trusts Solicitors by calling (02) 9233 4048 or emailing info@navado.com.au. 

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This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.

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