Discretionary trusts often provide the perfect solution for clients in the sports and entertainment industry because they offer flexibility, excellent asset protection and effective succession planning, enabling clients and their trustee to address any unforeseen events effectively.
With a discretionary trust, the trustee is given wide discretionary powers as to when, how much and to which beneficiaries income and capital should be distributed – useful when future needs can’t easily be determined.
Benefits of a discretionary trust include:
- Trustees are allowed to select which of a named class of beneficiaries will benefit and when.
- They are able to hold shares of special companies (SPVs) from various jurisdictions, which are in turn commonly used to hold IP and accept royalties subject to proper tax planning advice.
- They are useful when guarding assets from unforeseen claims, such as stemming from a marital dispute or relationship breakdown.