Discretionary beneficiaries often think that they’re entitled to benefit equally when trustees distribute trust assets.
Although bound to act honestly and in good faith for the benefit of all of the beneficiaries, trustees are not obliged to treat discretionary beneficiaries the same.
There is an old saying in the law: you can’t take the benefit then reject the burden. Non-ownership of the trust property protects the beneficiaries from creditors, Family Protection claims and, to a lesser extent, from relationship property claims. In exchange for these protective benefits, the beneficiaries are placed at the disposal of the trustees, who can distribute or withhold trust assets at their discretion.
For further information on the rights of discretionary beneficiaries please send us a message or contact us on 477 8080