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ARTICLE · 19 MAY 2012

TMSF v Merrill Lynch Bank – Breaking into Discretionary Trusts

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A discussion of the United Kingdom's Privy Council decision in TMSF v Merrill Lynch Bank [2011] UKPC 17.

AustraliaFinance and Banking
Bede Haines
Bede Haines
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It is a common source of frustration for creditors that the legally available assets of an apparently wealthy debtor are housed in a discretionary trust and placed beyond reach. Conversely, it is likely to be a source of anxiety for a debtor-beneficiary of a discretionary trust as to how well it is able to protect itself against claims of the beneficiaries creditors.

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A recent decision of the United Kingdom's Privy Council TMSF v Merrill Lynch Bank [2011] UKPC 17 found that the assets of a discretionary trust established in the Cayman Islands were available to creditors of an extremely wealthy individual. The decision has caused some consternation in the common law world (including in Australia).

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