What is the Difference between a Standard Discretionary Trust and a Family Protection Trust?

It's a different style of trust which is focused on succession through the family protection appointor - starting at the first FPA then on their death, divorce, disability or bankruptcy, it switches to the next FPA and then the next and so on.  The principal beneficiary is the FPA, their spouse (if desired), their children, grandchildren and relatives plus entities associated with them.  It is primarily for family lineage but you can see from the clause below that additional beneficiaries who are not blood relatives can be included with the FPA consent.

3.  Beneficiaries 

3.1  The beneficiaries of the Trust shall comprise: 

1. 1. the FPA; 
   2. any lineal descendent child, grandchild or great grandchild of the FPA; 
   3. to any other relative of any FPA born before the termination date, if any; 
   4. Corporations: SMITH BUCKET Pty Ltd ACN: 102 144 578 and any company, whether now existing or hereinafter incorporated in which a director, or a person who beneficially owns a share carrying a right to vote at general meetings, is a beneficiary by reason of a preceding paragraph of this sub-clause; 
   5. Secondary trust: The trustee or any trustees of any trust, whether now existing or hereinafter created, of which a beneficiary or discretionary object hereunder is a beneficiary of the Trust; 
   6. Superannuation Fund: The trustee of a superannuation fund including a self-managed superannuation fund where the FPA or any beneficiary is or was a member; 
   7. Benevolent objects: The trustee of any charitable trust, and any person, officer or governing body of an association in its capacity as such of any society, authority, institution, church, religious order or person or entity which at the time a distribution of income or capital of the Trust is to be made is exempt from income tax under the provisions of the Act, or if at such time a gift of money thereto is deductible against assessable income of the donor by virtue of the Act. 

3.2  Additional beneficiaries 

1. 1. A natural person who is not a beneficiary under clause 3(1) may become a beneficiary, other than a default beneficiary, where the trustee, with the consent of the FPA in writing, so determines and appoints, provided that any such appointment shall not be contrary to any express provision of this deed and neither the Settlor, that person who is then the appointor, or any person whose appointment would result in infringement of any rule or law against perpetuities or vesting which may apply to the trust, shall then be appointed as a beneficiary.

Please be advised this is general information only, and is not to be taken as legal advice. If you would like more information, or have a legal query, please contact Abbott & Mourly directly.
Reviewed: 17/01/2024