primary beneficiaries in a discretionary trust

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dumadiscount
Member
@dumadiscount
Join Date: 2004
Post Count: 3
October 28, 2006 - 4:36 am
i am setting up a discretionary trust for me and my partners business.
– i will be appointor
– she will be sole director of the corporate trustee
is it ok if both her and I are the “primary beneficiaries”, with any of our relatives being the secondary beneficiaries.
im just not sure as most of the discretionary trusts ive seen the primary beneficiaries are usually married.
help appreciated!
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
October 28, 2006 - 11:13 am
I am not a solicitor, but would wonder if it is necessary to list either of you as named beneficiaries. Usually trust deeds are worded so that the trustee and appointer and their relatives are automatically beneficiaries. Not sure what legal effects listing or not listing will have.
There may be tax effects too. eg. if you forget to distribute income one year, some trusts are worded so the income is automatically distributed to the main beneficiaries. Probably because the trust would have to pay tax at the top rate. There may be other effects too of which I am not aware.
Better run this one by an accountant?
Also, if your trust is going to be borrowing any money, sometimes some banks was personal guarantees from any adult beneficiary listed in the trust. Something to keep in mind too maybe.
Terryw
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cata
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@cata
Join Date: 2005
Post Count: 559
November 7, 2006 - 6:53 am
It really depends on how the trust deed is worded. You will need to ask this question to the people who are setting up the trust for you. They will be able to give you the best answer for the trust you are purchasing.
CATA
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celeste
Participant
@celeste
Join Date: 2005
Post Count: 169
November 7, 2006 - 2:00 pm
Hi dumadiscount
are you setting up a Company as the Trustee of the trust?
My trust ( no company) was set up in may 06 and has
” the children” of me and my hubby as Primary Beneficiaries.
Were just general beneficiaries.
Your Accountant will go throught who, what ,where when you set it up.
Celeste