The beneficiaries are the people (including entities) for whose benefit the trustee holds the trust property. A discretionary trust usually has a wide range of beneficiaries, including companies and other trusts. The beneficiaries of a discretionary trust do not have an interest in the assets of the trust.
Can a beneficiary of a discretionary trust be a trustee?
Can A Trustee Be A Beneficiary? Yes – although in the interests of the trust, it’s good practice to ensure: There’s no conflict of interest between someone’s role as a trustee and their position as beneficiary.
Can a beneficiary be removed from a discretionary trust?
A discretionary beneficiary can release their equitable right to be considered by the trustees when they exercise their discretionary powers of appointment or advancement.
Does a discretionary trust have beneficiaries?
When you set up a Discretionary Trust, you identify a class of beneficiaries such as children and/or grandchildren who can receive capital and/or income from the trust at the discretion of the Trustees. No one beneficiary has an absolute entitlement to either income or capital.
What rights does a beneficiary of a discretionary trust have?
Generally, a discretionary beneficiary has the right to: request from the trust or its representatives, documentation for the trust (i.e. trust deeds, appointment/removal of trustee documents, details of trust distributions, trust accounts, trustee contact details and details of trust assets and liabilities);
Can you have a discretionary trust with only one beneficiary?
A Discretionary Trust allows your Trustees the discretion and choice to make payments (distributions) to the potential beneficiaries (or category of beneficiaries) named within the Discretionary Trust. If you have only named one beneficiary, then this is NOT a Discretionary Trust.
What happens to a Discretionary Trust when beneficiary dies?
Yes, with our Discretionary Trust the settlor has the power to appoint additional trustees at any time. After you die, the trustees will have the power to appoint additional trustees. If a trustee dies, the remaining trustees can still carry on with the role, but a replacement could be appointed.
Who are the beneficiaries of a discretionary trust?
It would not seem sensible to require trustees to ascertain the identity of every possible beneficiary under a discretionary trust for a very wide class of beneficiaries and inform them individually of the existence of the trust. [1] The law is unclear about what information a trustee must give beneficiaries.
Can a trust have more than one beneficiary?
Although every beneficiary would be deemed to own 100% of the shares held by the trust, that deemed ownership would not be sufficient (in and of itself) to cause an association. It may even be possible, with careful planning, to create multiple trusts with different beneficiaries (overlapping beneficiaries would need to be avoided).
Are there beneficial interests in discretionary trusts in Canada?
In Moules Industriels (C.H.F.G.) Inc., Plastech Inc. and 176104 Canada Inc. v. Her Majesty The Queen (2018 TCC 85) released May 3, 2018 (“ Moules Industriels ”), that issue was considered by the Tax Court of Canada.
What can a beneficiary do if a trustee refuses to provide information?
If trustees decline a request from a beneficiary for information, the beneficiary may file an application in the High Court alleging that the trustees have breached their duty to account by not providing information. The Court has the power to consider such an application under is supervisory jurisdiction to administer trusts.
