A brief look at discretionary trusts, beneficiary control and freezing orders following Filippini v Keystone.
In Filippini v Keystone Asset Management Limited [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.
However, Filippini’s control meant his expectancy under the trusts had real value for the purposes of r 7.35(5)(a) of the Federal Court Rules 2011 (Cth), which was enough to support freezing the trust assets.
If trust assets were distributed to Filippini, they would become his property and could then be pursued by creditors.
Whether a trustee in bankruptcy could use Filippini’s trust powers to reach the assets was left unresolved.
Control can justify freezing trust assets, but it does not make those assets directly available to creditors.