The crucial third party to the Trust Deed are the Beneficiaries. These are the group of people who the Trust is formed to benefit over time. With a standard Family Trust, this would normally include your immediate family and possibly more distant relatives. At the end of the day, it is your decision as the client as to who you wish to include in the Beneficiary List. However, we would recommend that to keep a Family Trust as robust as possible you should carefully consider whether you include friends, spouses of children, or other people of a non-blood relationship. It is also important to remember that with most standard Family Trusts the list of Beneficiaries would normally be declared to be Discretionary Beneficiaries. This means that although you may have a number of family members listed as beneficiaries of your Trust, they are only entitled to receive income or assets from the Trust at the discretion of the Trustees. A Discretionary Beneficiary is not entitled to demand anything from the Trust unless the Trustees have previously declared that the Beneficiary has an entitlement to that asset or income stream. You can also consider having the following entities as Beneficiaries of your Trust:
- other Trusts (especially if they have a common beneficiary to your Trust)
- charities and charitable organisations
- companies you have interests in.
However, care should be taken when including these types of entities, as there could be tax issues relating to including those types of entities.
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