Who are the parties to a Discretionary Trust?

Below is general information of the positions held in a Trust. If you are unsure of who should hold each position for a Trust should be, we recommend seeking legal advice.

 

Settlor

The Settlor is the person who creates a Trust by "settling" a sum of money on a Trust for the Beneficiaries. Often the Settlor is the Accountant, however to ensure the correct person is selected, the below requirements must be met.

A Settlor for a Trust:

  • must be an individual, a company cannot act as Settlor
  • must be over 18 years old
  • must be at "arms length" from the Trust and is not permitted to benefit from the Trust
  • cannot, under any circumstances, also be the Trustee, Appointor or a Beneficiary of the Trust
  • should not be related or associated in any way to the Trustee, Appointor or Beneficiary

 

Trustee

The Trustee is the legal owner of the Trust property, but not the beneficial owner.  The Trustee decides how to manage the Trust assets . The Trustee's overriding duty is to obey the terms of the Trust Deed and to act in the best interests of the Beneficiaries. 

The Trustee for a Trust:

  • may be one or more individual (must be over 18 years) or a Company

 

Appointor/Principal

The Appointor has the most power in a Trust, as they can remove and appoint the Trustee(s). 

The Appointor for a Trust:

  • may be one or more individual (must be over 18 years).
    (Appointing a Company as an Appointor requires legal assistance and therefore cannot be selected within the form. To engage with NowInfinity's Legal Referral Providers, click here.)
  • may be one of the Beneficiaries
  • can be the Trustee on the establishment of the trust, but they may not be appointed as Trustee at a later stage, or there may be adverse stamp duty consequences

 

Beneficiaries

Discretionary Trusts usually has a wide range of Beneficiaries, including Companies and other Trusts. The Beneficiaries do not have ownership over the Trust assets, but they have the right to be considered when the Trustee makes decisions about distributing income or property from the Trust. 

Was this article helpful?
1 out of 1 found this helpful
Have more questions? Submit a request