Legal Tip 206: Can a Discretionary Trust only have one Beneficiary?

Discussion in 'Wills & Estate Planning' started by Terry_w, 1st Jun, 2019.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Trusts with just one beneficiary are usually bare trusts. But it is possible that a discretionary trust could have just one beneficiary.

    It would be extremely unusual to find a discretionary trust with one beneficiary, but it can happy in trusts formed under a will.


    Would it even be discretionary with only one beneficiary?

    Yes, it would be if the trustee had the power to retain income or distribute it. That would give it the discretion.


    There would be little asset protection on the bankruptcy of the individual though because they would have something very close to a proprietary interest in the assets of the trust.


    More commonly a discretionary trust might have one named beneficiary plus multiple other beneficiaries who are relations of the named beneficiary.

    Seek legal advice before setting up a trust.
     
    Terry_w, 1st Jun, 2019
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