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Recent developments and practical considerations

Discretionary trusts are commonly used for tax and asset protection purposes. They allow trustees to distribute income, and to distance the assets of the trust from potential creditors. However, a recent court case has since questioned their effectiveness for asset protection purposes.

In ASIC v Carey, the court found that a beneficiary who controlled the trust and the trustee's powers of distribution (ie, as trustee or as a director of the corporate trustee) effectively 'owned' the trust assets - even though that trust was a discretionary trust - and in that case, the trust assets were not protected from the beneficiary's creditors.

If you have or intend to set up a discretionary trust for asset protection purposes, then you need to know what this case means to you and how it affects you and your discretionary trust. Professional advice from your accountant, financial planner or lawyer is invaluable and will certainly can help understand your rights and obligations so that you avoid unexpected results.

What should you do?

At PHANG LEGAL, practical recommendations from our experienced team of lawyers will help you navigate through the ever-changing legal system. If asset protection is important to you, then you must call us on +61 2 9687 8885 to discuss how we can assist you, or visit our website at www.phanglegal.com.au for more information regarding our practice.

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Ern Phang
Solicitor & Public Notary

PHANG LEGAL
www.phanglegal.com.au

About Ern Phang

Ern Phang is the solicitor director of Parramatta law firm, Phang Legal. Ern practises in the areas of property and commercial transactions, corporate compliance, and is an experienced company director and company secretary. Ern has extensive experience in civil litigation (ie, commercial and insurance claims, debt recovery and general disputes) and various forms of dispute resolution. Ern is also a notary public.

Ern has and continues to act for a variety of business (domestic and international), government departments and the military, and not-for-profit community/religious organisations - as well as individuals and their families. Ern is passionate about the local community, and enjoys being in local business involved with and supporting local organisations and local people.

Ern's dedication to his clients and community service continues to drive Phang Legal from strength to strength.

About Phang Legal

Phang Legal is a progressive and dynamic law firm offering a different attitude to the practice of law and a different approach to the delivery of legal services. The firm continues to honour the traditions and standards of the legal profession, while remaining current and relevant to ever changing client requirements and expectations. Phang Legal provides cost effective and practical solutions across a wide range of practice areas including conveyancing and property law, corporate and commercial law, litigation and dispute resolution, wills and estates (elders law), legal aid and criminal law, and notary public services.

6/83 George Street, Parramatta NSW 2150 AU
PO Box 1375, Parramatta NSW 2124 AU
Telephone: +61 2 9687 8885
Facsimile: +61 2 9687 8883
Web: www.phanglegal.com.au