Generally, discretionary beneficiaries under a trust have only one right, and that is the right to be considered when the trustee distributes income and/or capital of the trust. This is caselaw from over 50 years ago now – the English case of Gartside. This is actually what gives discretionary trust their strength in Asset Protection – the beneficiaries are not entitled to any assets held by the trustee, until the trustee has made them presently entitled to those assets or income. Gartside v IRC  AC 553 Example Homer is a discretionary beneficiary of the Homer Trust. The trust deed is worded so that Homer is just one of possibly hundreds of beneficiaries. Homer becomes bankrupt. A trustee in bankruptcy is appointed to take over Homer’s assets. Homer is still a beneficiary of the trust and if the trustee distributes income to him this will be taken by creditors. So the trustee doesn’t distribute to Homer but gives the trust income to others. Homer’s interest in the trust is essentially worthless to his creditors. Compare this to that of a unit trust. Under a unit trust unit holders would generally have an entitlement to the income of the trust in proportion to the percentage of units that they owned. So if Homer owned 20% of the units in a unit trust 20% of the trust income would be distributed to him each year and if he was bankrupt this income would fall into the hands of creditors. Note that the wording of deeds varies and the asset protection strength can vary depending on the wording so legal advice should be sought before a trust deed is settled. Also, note that there are many other ways a discretionary trust can be attacked. Having a trust in the mix does not necessarily mean asset protection.