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Below is Chapter 2 of our ‘Controlling a Family Trust When You Die’ booklet. To read the other chapters of our booklet, click the links below:
- Chapter 1 – Who controls your family trust?
- Chapter 3 – Distributing assets from the trust on your death
- Chapter 4 – Putting in place a ‘control structure’
How do you give ‘fixed percentages’ to your children?
As noted above, no one has any ‘fixed interest’ in the trust’s income or assets. The trustee gets to decide who gets what, from time to time.
If you currently control a discretionary trust, and want to give your children a ‘fixed interest’ in the assets of the trust when you die, for example an ‘equal interest’, then you need to put in place a strategy to overcome the ‘discretionary’ nature of the trust.
To do this, you need to carefully deal with the roles and authorities of the trustee and appointor. There are a number of things that can potentially go wrong when trying to create ‘notional’ fixed interests in a discretionary trust.
The information contained in this post is current at the date of editing – 3 April 2024.
