One of the advantages of owning assets through discretionary trusts is that control may be exercised without the controller necessarily owning any property that can be applied by creditors or other claimants. But recent case law suggests that courts may in some circumstances attribute property belonging to a discretionary trust to the controller of the trust.
This paper examines the recent cases that have considered this question and identifies the circumstances in which claimants may be able to access property in a discretionary trust. Topics covered include:
- traditional judicial approach to discretionary trusts
- Pope versus DRP Nominees
- Richstar Investments
- Kennon versus Spry
- future judicial trends in relation to creditor and family claims.