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QLD Discretionary Trust Distributions in Family Trust - Beneficiary Rights?

Discussion in 'Wills and Estate Planning Law Forum' started by littleapple, 13 June 2015.

  1. littleapple

    littleapple Member

    13 June 2015
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    As a beneficiary of a discretionary trust, what are my rights? I don't actually receive any of the distributions that are made to me, but my tax assessment shows I earn a lot more than I actually do because of these distributions. What are my rights here? Should I be receiving these distributions in family trust, or part thereof?
  2. Tracy B

    Tracy B Well-Known Member

    24 December 2014
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    Hi there,

    Is this family trust established under a will?

    I would speak with a taxation lawyer about this because Australian tax is extremely complicated and often changes. As far as I know, the trustee does the tax return. Each beneficiary then counts in their individual income their share in the trust, even if it is not actually distributed to them. Example, if you are entitled to 20% of a discretionary trust, then you include in your individual tax return income of 20% x that year's income for the trust. This occurs even if you do not receive 20% of the income.

    Your entitles are generally written in the trust document. If it is a discretionary trust, you are not entitled to distribution. The trustees only own a duty to (1) exercise their discretion, and (2) distribute according to the trust terms. Your right is to ensure the trustee fulfils these two duties. However, there is often no point suing because all you can ensure if the trustee makes a choice to distribute or not distribute and if so, who to distribute to.

    If you wish to speak with a taxation lawyer, you can have one recommended to you by LawAnswers here: Get Connected with the Right Lawyer for You -

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