Discretionary family trusts can sometimes trigger thoughts of
trust fund babies, insane amounts of funds held offshore, or
shielding trust assets from creditors or the taxman, all of which
are available to the ultra rich. However, family trusts are
becoming very common and the norm for many families, even those
without yachts! All kidding aside, a family trust is a standard
estate and tax planning tool for every family. So, I thought it
would be worthwhile to go through the "ABCs" of a
discretionary family trust, as well as some of the tax-planning
tips and traps to be aware of when forming a family trust.
Beneficiaries – who are they?
A typical family trust is drafted as a discretionary trust for
the benefit of a class of beneficiaries. Beneficiaries could
include yourself, your spouse and your issue (children,
grandchildren, great-grandchildren etc.), and in fact, can include
as many family or friends that you would like (subject of course to
certain tax issues
