Q&A

Question: Are there any disadvantages to operating a business as a discretionary trust?

Having a corporate trustee is usually a good idea when operating a business as a discretionary trust, as the trustee has all discretionary power over the trust property so you want to be sure they know what they’re doing and are trustworthy. The disadvantage is that a corporate trustee can be very expensive.

Also, trusts are a very complex structure and without good legal advice you can be caught in a very complicated web. Other commercial entities, businesses and financial institutions may also be hestiant to engage in business with one that operates as a trust.