---
title: "Discretionary (family) trust deed"
url: "https://ailawframework.com/precedents/trusts-and-estate-planning/discretionary-trust-deed"
type: "precedent"
site: "AI Law Framework"
id: "a19-discretionary-trust-deed"
area_id: "A19"
kind: "deed"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-17"
---

# Discretionary (family) trust deed

> Original starter deed for a discretionary family trust governed by NSW law, with an income definition, streaming power, foreign-person exclusion for NSW surcharge purposes, family trust election guard and a limited…

Canonical page: https://ailawframework.com/precedents/trusts-and-estate-planning/discretionary-trust-deed  
Law stated as at: 2026-10-17

Site index for agents: https://ailawframework.com/llms.txt

Original starter deed for a discretionary family trust governed by NSW law, with an income definition, streaming power, foreign-person exclusion for NSW surcharge purposes, family trust election guard and a limited variation power.

## Key facts

- Kind: Deed. A deed that must be executed as a deed.
- Practice area: [Trusts & Estate Planning](https://ailawframework.com/precedents/trusts-and-estate-planning.md)
- Jurisdictions: Australia, New South Wales
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-17
- Status: Maintained. Checked on 2026-10-17 against the 9 authorities it cites, for Australia and New South Wales.

## When to use it

Use to settle a new discretionary trust for a family group where the firm does not already have an approved deed. Do not use for unit trusts, superannuation funds, special disability trusts or testamentary trusts, or where the client needs a fixed trust for land tax or duty purposes.

## How AI may be used

AI may produce a first draft from the firm's approved deed and a completed instruction sheet, and check the drafting mechanics. The beneficiary class, income definition, vesting day and control provisions carry tax and duty consequences and are settled by the lawyer, with tax adviser input.

**AI may:**

- Populate the schedule and defined terms from a signed instruction sheet, flagging any blank or inconsistent item
- Check internal cross-references, defined terms used but not defined, and clause numbering
- Produce a one-page table of settlor, trustee, appointor, successor appointor, primary beneficiaries and vesting day for the lawyer

**AI must not:**

- Must not choose the beneficiary class, income definition, vesting day or appointor succession
- Must not add or remove the foreign-person exclusion or family trust election clauses without the lawyer's instruction
- Must not receive the family's financial or identity details in a tool whose terms allow training on inputs or offshore retention the firm has not approved

**The lawyer checks:**

- Vesting day falls within the perpetuity period of the governing law (80 years in NSW)
- Foreign-person exclusion meets both the no foreign beneficiary and no amendment requirements of Duties Act 1997 (NSW) s 104JA and Land Tax Act 1956 (NSW) s 5D
- Settlor is excluded from all benefit and is not a member of the family group
- Execution, dating and any duty or registration steps are complete before the trust acquires assets

## Authorities

- [Income Tax Assessment Act 1936 (Cth) Pt III Div 6 (ss 95, 97, 99A) and s 102](https://www.legislation.gov.au/C1936A00027/latest/text)
- [Income Tax Assessment Act 1936 (Cth) s 100A](https://www.legislation.gov.au/C1936A00027/latest/text)
- [Income Tax Assessment Act 1936 (Cth) Sch 2F s 272-80 (family trust election) and Div 271 (family trust distribution tax)](https://www.legislation.gov.au/C1936A00027/latest/text)
- [Income Tax Assessment Act 1997 (Cth) Subdiv 115-C and Subdiv 207-B (streaming of capital gains and franked distributions)](https://www.legislation.gov.au/C2004A05138/latest/text)
- [Perpetuities Act 1984 (NSW) s 7](https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1984-043)
- [Duties Act 1997 (NSW) s 104JA](https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1997-123)
- [Land Tax Act 1956 (NSW) s 5D](https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1956-027)
- [Trustee Act 1925 (NSW)](https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1925-014)
- [Commissioner of Taxation v Bamford 2010 HCA 10](https://www.ato.gov.au/law/view/document?docid=LIT/ICD/S310/2009/00001)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/trusts-and-estate-planning/discretionary-trust-deed and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*