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Where assets are held in a discretionary trust, the legal ownership of those assets is vested in the trustees who maintain and manage the trust assets for the benefit of the named beneficiaries, or a defined class of beneficiaries (eg members of a club). In general, there is more than one beneficiary but no beneficiary has any guarantee or specific right to any of the trust assets, as the trustees have the absolute discretion as to which of the trust assets to allocate, to whom the assets are allocated and when.

The trustees are obliged to actively make decisions regarding when the assets might be allocated and to whom and no beneficiary may compel the trustees to allocate the assets to them.

In light of the power vested in the trustees of a discretionary trust, it is vital that competent, trustworthy and impartial trustees are chosen. In general, at least two trustees should be chosen, and the trustees must agree on all decisions.

The trust document will provide wide powers to the trustees to invest and manage the trust