What is so important about Owies case?

The Owies case is a recent decision by the Victorian Court of Appeal that has had a significant impact on the way discretionary trusts are administered in Australia. In a nutshell, the case found that trustees of discretionary trusts have a fiduciary duty to consider all beneficiaries of the trust, even if the trust deed gives them absolute discretion over distributions. This means that trustees cannot simply ignore certain beneficiaries, even if they are estranged or have fallen out with the settlor.

The Owies case has a number of implications for Australian business owners who use discretionary trusts to protect their assets and manage their estates. First, it means that trustees need to be more careful about how they make distributions from the trust. They cannot simply pick and choose who to benefit, and they need to be able to justify their decisions if challenged. Second, the case highlights the importance of having a clear and well-drafted trust deed. The deed should set out the specific criteria that the trustee must consider when making distributions, and it should also include a mechanism for resolving disputes between beneficiaries.

If you are a business owner who uses a discretionary trust, it is important to speak to an estate planning lawyer to discuss the implications of the Owies case. They can help you to ensure that your trust is properly administered and that your beneficiaries are protected.

Here are some specific things that business owners should consider in light of the Owies case:

• Make sure that the trust deed clearly sets out the criteria that the trustee must consider when making distributions. This could include factors such as the financial needs of the beneficiaries, their relationship with the settlor, and their contribution to the trust.
• Consider appointing a professional trustee who is experienced in administering discretionary trusts. This will help to ensure that the trust is properly managed and that the trustee's decisions are fair and impartial.
• Be prepared to challenge any decisions by the trustee that you believe are unfair or unreasonable. The Owies case shows that the courts are willing to intervene where trustees have not acted in the best interests of all beneficiaries.

By taking these steps, you can help to ensure that your discretionary trust is protected and that your beneficiaries are treated fairly.