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Understanding Discretionary Trusts in Queensland: A Powerful Asset Protection Tool

In the world of estate planning and asset protection, Discretionary Trusts have emerged as a valuable tool for individuals and families seeking to safeguard their wealth and plan for the future.

An Old and Young Hand Side by Side

What is a Discretionary Trust?

A Discretionary Trust, commonly referred to as a 'Family Trust', is a structure where a trustee holds assets and distributes income or capital to beneficiaries at their discretion.

The trust deed outlines the rules and conditions under which the trustee makes these distributions, granting them a significant degree of flexibility. As discretionary trusts are commonly used by families, the beneficiaries are usually immediate family members such as spouses, children, grandchildren, but may also charitable organisations and other individuals or entities.

How does a Discretionary Trust work?

In a Discretionary Trust, the beneficiaries do not have fixed entitlements to the trust's income or assets. Instead, the trustee has the discretion to decide how and when to distribute assets among the beneficiaries. This discretion allows the trustee to adapt to changing circumstances and individual needs.

Benefits of Discretionary Trusts in Queensland

  1. Asset Protection: One of the key advantages of a Discretionary Trust is its ability to protect family assets from potential creditors, legal claims or government duties. As the beneficiaries do not legally own the assets, they are shielded from creditors seeking payment for personal debts or claims arising from litigation.

  2. Tax Planning and Minimisation: Discretionary Trusts offer effective tax planning strategies by allowing income to be distributed among beneficiaries in the most tax-efficient manner. This can be particularly beneficial if there are family members in lower earnings (and thus a lower relative income tax bracket) or who are eligible for tax concessions.

  3. Estate Planning Flexibility: As family dynamics evolve, the trustee can adapt the distribution of assets to meet changing needs and circumstances. This flexibility ensures that the trust remains relevant and effective across generations.

  4. Avoiding Probate Delays: Assets held within a Discretionary Trust may bypass the sometimes lengthy and expensive probate process. This means that the distribution of trust assets to beneficiaries can occur relatively quickly and privately after the settlor's passing.

  5. Confidentiality and Privacy: Unlike a Will, which becomes a public document upon probate, the terms and beneficiaries of a Discretionary Trust remain confidential, providing a higher level of privacy for the family.

  6. Wealth Preservation: By putting assets in a Discretionary Trust, families can ensure their preservation and controlled management for the benefit of future generations, preventing assets from being squandered or mismanaged.

Key Considerations

While Discretionary Trusts offer numerous benefits, it is essential to keep some considerations in mind:

  1. Legal Advice: Setting up a Discretionary Trust requires professional legal advice to ensure compliance with all relevant laws and regulations in Queensland.

  2. Trustee Selection: Choosing the right trustee is crucial, as they hold significant power over trust assets. It's advisable to appoint a reliable and impartial individual or corporate trustee.

  3. Distribution Strategy: Developing a well-thought-out distribution strategy is essential to ensure the trust's objectives align with the family's needs and financial goals. This includes considering the beneficiaries, portions and assets to be provided.

  4. Taxation: It is important to also speak with a financial specialist of the taxation and financial implication of implementing a trust on both yourself and your intended beneficiaries. Complex PAYG calculations, and debt liability are important considerations.


Discretionary Trusts are a valuable and versatile tool that can provide asset protection, tax advantages, and estate planning benefits for Queenslanders.

It's important to remember that Discretionary Trusts are not just for individuals with advanced wealth or assets, and can be utilised by anyone seeking particular and specific outcomes.

Given the intricate legal implications associated with Discretionary Trusts, seeking professional legal advice is non-negotiable. Engaging an experienced lawyer can help individuals and families navigate the complexities, ensure compliance with changing regulations, and create a trust structure that aligns with their financial goals and family dynamics.

Why not speak with our senior solicitors today, and discuss how a Discretionary Trust may be beneficial for you.


Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.

RHC Solicitors ©


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