Understanding the types of trusts
Different types of trusts work best in different situations. The right choice depends on your family, assets and goals.
Primary Trust Types
Select one primary trust as the foundation of your estate plan.
A family trust (discretionary trust) is the most common type. Trustees have discretion about how and when to distribute income or capital to beneficiaries, within the rules of the trust deed. This flexibility helps with asset protection, tax planning (with accounting advice), and supporting family members at different times as needs arise.
Best for: Most families, asset protection from creditors and lawsuits, flexible wealth management, adapting to changing circumstances.
How it works: Usually set up by a couple or individual. The settlors are typically the main beneficiaries during their lifetimes, with children and other loved ones next in line, followed by their descendants.
A defined interest trust gives each beneficiary a clearly defined share — specific percentages or entitlements that don't change. Less flexible than a family trust, but provides certainty.
Best for: Blended families, protecting children from previous relationships, someone in a new relationship who wants to be fair to both partner and children, when certainty about who gets what matters most.
How it works: The settlor typically has rights during their lifetime (such as living in the home). After they die, other beneficiaries receive their defined shares. A new partner can be given limited rights on defined terms.
A multi-generational trust preserves wealth across generations rather than paying everything out to the next generation. Capital stays protected in the trust.
Best for: Significant family wealth, long-term legacy planning, protecting against relationship property claims across generations, providing for multiple generations, families wanting to keep the family home or bach in the wider family.
How it works: You benefit during your lifetime. When you die, your children receive income but not the capital. When your children die, grandchildren benefit. The capital stays protected for future generations.
Parallel trusts create a separate trust for each partner, typically where each person wants to keep their pre-relationship assets separate and ensure their own children ultimately benefit.
Best for: Couples in second or later relationships, where each partner has pre-existing assets and children from previous relationships, protecting separate family lines.
How it works: Each partner sets up their own trust. The other partner can have defined rights (living in the home, maintenance) which usually end on permanent separation or entering a new relationship. Remaining trust assets then go to that settlor's own children.
Add-On Trust Types
These trusts can be added to any primary trust type for additional protection.
A business trust holds business assets or higher-risk investments separately from your family trust. If the business fails or gets sued, your family assets stay protected.
Best for: Business owners, property developers, high-risk investments, anyone who wants to separate business risk from family assets.
An inheritance trust holds an inheritance on trust for a specific child, grandchild or other beneficiary who needs help managing money or extra protection.
Best for: Protecting inheritances from relationship property claims, children who may not manage money well, beneficiaries with disabilities, providing structured support over time.
Can be set up now with a small initial settlement then receive funds after your death, or established directly in your will.
Not sure which trust type is right for you?
We'll explain your options in plain English and recommend the structure that fits your family and goals.