Recital 115

(115) Discretionary trusts allow their trustees discretion on the allocation of the trust assets or benefits derived from them. As such, no beneficiaries or class of beneficiaries is determined from the outset, but rather a pool of persons from among which the trustees can choose the beneficiaries, or persons who will become beneficiaries should the trustees not exercise their discretion. As recognised by the recent revision of FATF standards regarding legal arrangements, such discretion can be misused and allow for the obfuscation of beneficial owners if a minimum level of transparency is not imposed for discretionary trusts, as transparency on beneficiaries would only be achieved upon the exercise of the trustees’ discretion. Therefore, in order to ensure an adequate and consistent transparency for all types of legal arrangements, it is important that, in the case of discretionary trusts, information is also collected on the objects of a trustee’s power and on the default takers who would receive the assets or benefits if the trustees fail to exercise their discretion. There are situations where objects of a power or default takers might not be identified individually, but as a class. In those cases, information on the class should be collected, as well as information on the individual persons who are selected from the class.

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Source: EUR-Lex CELLAR · retrieved 2026-09-04 · Text as adopted (Official Journal); later amendments are not incorporated in this text.