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Legal > Asset Protection & Trusts Law

Discretionary Trusts:

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Within the intricate framework of law governing trusts, there are a diverse range of trusts that can be instituted or are implied, including unit trusts, trading trusts, constructive trusts, implied trusts, express trusts and resulting trusts. One of the most common forms of trusts set up by Asset Protection Lawyers in Sydney is the discretionary trust. Discretionary trusts are sometimes referred to as family trusts (for ATO purposes) when used for the purposes of family succession or as a vehicle to operate a family business. Different tax treatments apply to family trusts.

The capacity to protect assets, minimise tax (by taking advantage of concessional tax treatment and income splitting) and provide for flexible distributions of profits, are the factors driving the attraction and interest in discretionary trusts in Australian businesses and amongst successful families. One of the most advantageous features of the discretionary trust is that the potential beneficiary or potential beneficiaries do not have a specific apportionment or entitlement to income, profits, shares or interests to the trust assets. Unlike fixed trusts (where the beneficiaries are entitled to a designated portion of the trust profits), a discretionary trust gives the trustee “discretion” in the distribution of profits and assets to the beneficiaries. Accordingly, the assets of the trust are protected because the beneficiaries have no specific legal entitlement to them. On that notion, a creditor seeking relief from a beneficiary will generally have no entitlement or legal right to seize or access any assets or liquid funds held by the trust.

To properly take advantage of a discretionary trust, it is necessary to obtain sound legal and tax advice. Our Trust Lawyers and Asset Protection Solicitors are highly experienced in establishing and maintaining trust structures.

Contact our office to speak to a Trusts Lawyer or Asset Protection Solicitor. We have branch offices conveniently positioned across the Sydney metropolitan area. 

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