4 Key Points About Development In A Discretionary Trust
A discretionary trust is very simple; it's not a very complex trust structure at all.
The limitations of a discretionary trust is that only one family can be involved in the development, at least the entity that carries out. If someone's got two different families going into a development, I personally wouldn't be using a discretionary trust because you don't own a fixed entitlement to that trust. So, it's simple but it's limited.
You could access bank funding with a discretionary trust, and you can't use your own super to fund the project, unless it's other parties. I guess if it's not your super, then you could explore getting a loan from someone's SMSF if they're an unrelated party.
Discretionary trusts aren't common for us, because usually our developments will involve multiple different families; usually two or three or more. But occasionally we do have the odd one who we do discretionary trusts for. We can even do partnerships of trusts, for example if you've got different brothers and sisters who are going in on the development, so they can have a split.