Family Trust

A family trust is a discretionary trust established while you are alive (an inter vivos trust) to hold investments, a family business, or other assets for the benefit of a family group. Because the trustee can direct income to different family beneficiaries each year, family trusts are widely used for tax planning and asset protection. In estate planning they matter because trust assets are not owned by you personally, so they generally fall outside your estate and are not distributed by your Will.

Control of a family trust usually passes through the role of "appointor" — the person who can hire and fire the trustee — so succession of that role should be addressed alongside your Will. Example: Sophie's Will cannot give away the shares held by her family trust, so she instead nominates her successor as appointor in the trust documents. A formal "family trust election" with the ATO can lock in tax treatment but narrows who can benefit.