A discretionary trust (or family trust) the beneficiaries do not have a fixed entitlement or interest in the trust funds. The trustee has the discretion to determine which of the beneficiaries are to receive the capital and income of the trust and how much each beneficiary is to receive. The trustee does not have a complete discretion. The trustee can only distribute to beneficiaries within a nominated class as set out in the terms of the trust deed.
For all discretionary trusts the Primary Beneficiary will be a nominated person or persons.
The Secondary Beneficiaries include spouses of the Primary Beneficiaries and spouses of certain other relations of the Primary Beneficiaries. The trust terms permit discretionary distributions of both income and capital to the Secondary Beneficiaries.
For all discretionary trusts, the Tertiary Beneficiaries will include:
(a) the trustee of any trust or settlement in existence on or before the Vesting Day in which:
(i) any of the Primary Beneficiaries or Secondary Beneficiaries is named as a beneficiary or is a member of a class of beneficiaries named in that trust; and
(ii) none of the capital or income is or may be held for the Settlor;
(b) any company in existence on or before the Vesting Day in which:
(i) any individual Primary Beneficiary or Secondary Beneficiary is a director of;
(ii) any one or more of the Primary Beneficiaries or Secondary Beneficiaries is a beneficial owner of shares of any type; or
(iii) shares of any type are owned by or on behalf of the trustee of any trust referred to in paragraph (a); or
(iv) the Trustee owns shares of any type;
(c) any religious, charitable, educational (primary, secondary or tertiary) or benevolent institution that by resolution the Trustee appoints;
(d) any person (including the trustee of any other trust or settlement or superannuation fund in which the Settlor has no right to capital or income) that by resolution the Trustee appoints;
(e) the trustee of any unit trust which has as a unitholder the trustee of any trust referred to in paragraph (a); and
(f) the legal personal representative of any of the Primary Beneficiaries or Secondary Beneficiaries.