What is a Discretionary Trust Deed?
A Discretionary Trust, also known as a Family Trust (there is a differing definition in the Tax Acts), is not a separate legal entity unlike a Company.
The sole purpose of a Discretionary Trust is to distribute income to particular Beneficiaries nominated in the Deed and decided by the Trustee at any given time (at the trustee's discretion).
Reasons why you would consider using a trust are: Asset Protection, Estate Planning and flexibility for distribution of income.
Whilst a Trust cannot hold assets or incur liabilities, the Trustee has a legal obligation to hold and maintain the assets and liabilities on behalf of the Trust for the Beneficiaries.
The most common form of a Trustee is an Incorporated Company controlled by the Principal Beneficiary (Appointor) of the Trust to ensure the continuity and future security of the Trust.