Who controls a Discretionary Trust?
Discretionary trusts (often referred to as family trusts) are a very common method of holding assets in Australia, and are used to hold property and other financial assets and also as a way to own and operate small businesses.
While they are very common, discretionary trusts are often not understood by the people for whom they have been established. One of the most misunderstood (or unknown) elements of a discretionary trust is the power of appointment. This power (which is usually in the hands of a person called an “Appointor” or a “Principal” is key when considering trusts as part of an estate plan. In this article we will use the term Appointor.