
    <p>In <em>Filippini v Keystone Asset Management Limited</em> [2026] FCAFC 71, the Full Court confirmed that a discretionary beneficiary does not own the trust assets, even if they have significant control over the trust.</p>

    <p>However, Filippini’s control meant his expectancy under the trusts had real value for the purposes of r 7.35(5)(a) of the <em>Federal Court Rules 2011</em> (Cth), which was enough to support freezing the trust assets.</p>

    <p>If trust assets were distributed to Filippini, they would become his property and could then be pursued by creditors.</p>

    <p>Whether a trustee in bankruptcy could use Filippini’s trust powers to reach the assets was left unresolved.</p>

    <p><strong>Control can justify freezing trust assets, but it does not make those assets directly available to creditors.</strong></p>
  

Trust Control and Freezing Orders: Filippini v Keystone


    <h2>What Is a Will?</h2>

    <p>A will is a legal document that sets out what should happen to a person’s property after they die.</p>

    <p>A will can identify who should receive assets, appoint an executor to administer the estate and provide directions about how particular property should be dealt with.</p>

    <h2>The Executor</h2>

    <p>An executor is the person appointed by the will to administer the deceased estate.</p>

    <p>The executor is generally responsible for identifying and collecting the deceased’s assets, paying debts and expenses and distributing the remaining estate according to the will.</p>

    <p>A will may appoint more than one executor.</p>

    <h2>Beneficiaries</h2>

    <p>A beneficiary is a person or organisation entitled to receive something under a will.</p>

    <p>A will may leave particular assets or amounts of money to specific beneficiaries. It will also usually deal with the residue of the estate, being the property remaining after debts, expenses and specific gifts have been dealt with.</p>

    <h2>Testamentary Trusts</h2>

    <p>A will can also establish a testamentary trust.</p>

    <p>Instead of an inheritance passing directly to a beneficiary, the assets are held and managed by a trustee according to the terms of the will.</p>

    <p>Testamentary trusts may be used for asset protection, tax planning or the long-term management of an inheritance.</p>

    <h2>What Happens After Death?</h2>

    <p>After a person dies, their property, money and debts form their deceased estate.</p>

    <p>The executor may need to obtain a grant of probate from the Supreme Court of Victoria. Probate confirms that the will is the deceased’s last valid will and confirms the executor’s authority to administer the estate.</p>

    <p>Not every estate requires probate. This can depend on the type and value of the assets and how they are held.</p>

    <h2>What If There Is No Will?</h2>

    <p>A person who dies without a valid will is said to have died intestate.</p>

    <p>Instead of the estate being distributed according to a will, Victorian intestacy laws determine who is entitled to receive the estate.</p>

    <p>A close family member or next of kin may need to apply for letters of administration to obtain authority to administer the estate.</p>

    <h2>Making a Will</h2>

    <p>A will is an important part of estate planning because it allows a person to decide who should administer their estate and how their property should be distributed after death.</p>

    <p>Wills should also be reviewed when circumstances change, such as following marriage, separation, the birth of children or significant changes in assets.</p>

    <p>Wills and deceased estates can involve important legal, tax and property consequences. Legal advice should be obtained when preparing or changing a will, particularly where an estate involves businesses, trusts, significant property or complex family arrangements.</p>
  

Wills in Victoria: A Plain-English Guide


    <p>The general rule is that a discretionary beneficiary does not beneficially own the assets of the trust. Even where a beneficiary controls the trustee—or is personally the trustee—that does not ordinarily make the trust assets their own beneficial property.</p>

    <p>Two important cases test the limits of that principle.</p>

    <p>In <em>ASIC v Carey (No 6)</em> [2006] FCA 814, French J suggested that where the trustee is effectively the alter ego of a beneficiary, the beneficiary may have at least a contingent interest approaching beneficial ownership. The case remains an important warning where a discretionary trust is relied upon for asset protection. However, it concerned receiver orders under the <em>Corporations Act 2001</em> (Cth), not bankruptcy, and did not establish that control always equals beneficial ownership.</p>

    <p>In <em>Kennon v Spry</em> [2008] HCA 56, the High Court brought trust property within a family-law property settlement. The result depended on Dr Spry’s extensive powers and control, Mrs Spry’s equitable rights and the particular operation of the <em>Family Law Act 1975</em> (Cth). It was not a general creditors’ case.</p>

    <p>Later decisions, including <em>Swishette Pty Ltd v ACCC</em> [2017] FCAFC 45 and <em>Fordyce v Ryan</em> [2016] QSC 307, support the orthodox position that control of a discretionary trust does not, by itself, amount to beneficial ownership of its assets.</p>

    <p>The practical lesson is that extensive control can weaken the protective effect of a trust, but the outcome depends heavily on the trust deed, the controller’s powers and the statutory context.</p>
  

Trust Control and Beneficial Ownership


    <h2>What Is a Trust?</h2>

    <p>A trust is an arrangement where a trustee holds and manages property for one or more beneficiaries. The trustee controls the trust assets but must deal with them according to the trust deed or will.</p>

    <h2>Discretionary or Family Trust</h2>

    <p>A discretionary trust allows the trustee to decide which beneficiaries receive income or capital and how much they receive. These trusts are commonly used by families to operate businesses, hold investments and plan for succession.</p>

    <h2>Unit Trust</h2>

    <p>A unit trust divides beneficial ownership into units. Each unitholder has an interest based on the number and type of units they hold. Unit trusts are often used when unrelated parties invest together in a business or property.</p>

    <h2>Fixed Trust</h2>

    <p>A fixed trust gives beneficiaries defined entitlements to income or capital. The trustee generally has little or no discretion over each beneficiary’s share. Some unit trusts operate as fixed trusts.</p>

    <h2>Testamentary Trust</h2>

    <p>A testamentary trust is created by a will and begins after the will-maker dies. Instead of passing directly to a beneficiary, an inheritance is held and managed by a trustee. These trusts may assist with asset protection, tax planning and the long-term management of an inheritance.</p>

    <h2>Bare Trust</h2>

    <p>A bare trust exists where the trustee holds legal title to an asset for a beneficiary who has the beneficial interest. Bare trusts may be used in nominee, custodial and property arrangements where legal and beneficial ownership are separated.</p>

    <h2>Choosing the Right Trust</h2>

    <p>The appropriate trust depends on who should control the assets, who should benefit, whether ownership interests need to be fixed and what should happen following death or incapacity.</p>

    <p>Trusts can have significant legal, tax, duty and land tax consequences, particularly when Victorian property is involved. Legal and tax advice should be obtained before establishing a trust, acquiring property through one or changing a trust deed.</p>
  

Tim Cullin

Articles by Tim Cullin

Trust Control and Freezing Orders: Filippini v Keystone

Wills in Victoria: A Plain-English Guide

Trust Control and Beneficial Ownership

Types of Trusts: A Plain-English Guide