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The Benefits of Establishing a Discretionary Trust

by | Mar 18, 2024 | Corporate & Business

A discretionary trust can be a versatile and powerful tool as it offers individuals and businesses a range of benefits.  As a legal structure, it allows for the strategic management and distribution of assets and provides level of flexibility that can prove invaluable.

Some of the many benefits of establishing a discretionary trust include:

Tax Efficiency

A discretionary trust can be an effective way of managing tax liabilities in some situation.  By distributing income among beneficiaries, it is possible to take advantage of their individual tax brackets which could result in overall tax savings.

Asset Protection

A discretionary trust can potentially shield assets from creditors or legal disputes and adds a layer of protection.  This is because the assets are held within the trust and are separate from personal assets therefore reducing the risk of exposure in case of unforeseen circumstances.

Estate Planning

A discretionary trust offers a strategic approach to estate planning.  The structure of a trust allows for the transfer of assets to beneficiaries and means the probate process is bypassed and could minimise costs and delays.

Distribution flexibility

A discretionary trust provides a high level of flexibility as the trustee has the discretion to distribute income or assets among beneficiaries.  Distributions could be determined based on their changing needs, financial circumstances or tax implications.

Business Succession

For family businesses, a discretionary trust can allow for a transition of assets and control to the next generation, ensuring the business’s continuity while maintaining financial stability.


A discretionary trust, like most business structures do require careful management, however there is a reduced administrative burden compared to other structures available.

How can Nevett Ford help?

Whether for tax benefits, asset protection, or estate planning, a discretionary trust offers individuals and businesses a many benefits and our Commercial and Business Team have extensive knowledge in the area.  For more information, please contact us on 03 9614 7111 or by email at melbourne@nevettford.com.au.