Discretionary trusts are common structures for family businesses. How do we effectively transition these structures to the next generation?

A significant transfer of wealth to succeeding generations is happening in Australia and this will no doubt continue over the coming decades. As seen in practice, much of this wealth is linked to businesses owned by discretionary trusts.

In this article, “discretionary trust” refers to an express private trust pursuant to which:

• the trustee has a wide discretion in relation to dealings with the trust property;

• there is a single class of discretionary objects, none of which have more than a mere right to the due administration of the trust; and

• the trustee has a discretion to appoint income or capital to any one or more (including to the exclusion of the others) of the discretionary objects (the beneficiaries) as they see fit from time to time.

The full paper is available to Sladen Smart Members sign up/login here to continue reading.