It Depends – What happens to the assets in my discretionary trust when I die?

In this edition of It depends, associate Sacha Robinson talks about what happens to the assets in your discretionary trust when you die.

Video transcript

Welcome to the latest edition of It Depends. Today I will be talking about what happens to the assets in your discretionary trust when you die.

What happens to the assets in my discretionary trust when I die?

It depends.

Can my Will deal with the assets in my discretionary trust?

Trust assets do not form part of your estate, so you cannot directly deal with them in your Will. Instead, you have to look to pass control of the trust and the trust assets.

How do I pass control of my discretionary trust?

It depends. This is really going to depend on the terms of your trust deed. There are a few issues we need to look at when determining how control of your trust passes on your death. Firstly, you will want to consider the succession of the appointor role, whether this is covered within the deed itself, in your Will or by a separate deed. You will need to read the deed and figure out how this passing of control works. Secondly, you will also need to have a look at the succession of the trustee role, particularly if there is no appointor of the trust.

What do I do next?

It is really important to check the terms of your trust deed and your Will as we find a lot of advisers and clients are not aware of how the appointor role passes in the trust deed and often it does not work as they expect it to. Please contact me or a member of our team if you would like us to review your trust documents.