Assets held in a trust are generally protected from the personal liabilities of beneficiaries. So, if a beneficiary becomes bankrupt or faces legal issues, the assets within the trust are generally protected from creditors.

The trustee has the discretion to distribute income to beneficiaries in a manner that minimizes the overall tax liability. This means income can be split among family members in lower tax brackets, potentially reducing the total tax paid by the family.

Trusts can serve as a mechanism to ensure the smooth transition of business assets and wealth to future generations without triggering capital gains tax or going through probate. This can be especially vital for family-owned businesses that wish to remain in the family for generations.

Trusts allow for flexibility in distributing income. For instance, income can be distributed to adult children studying at university or to other family members with lower incomes, thereby taking advantage of their lower tax rates.

Under certain conditions, when assets are sold or transferred within the trust, beneficiaries may be eligible for a 50% discount on capital gains if the asset has been held for over 12 months.

Even though the assets are held in the trust, the individual establishing the trust (the settlor) can maintain a level of control over them, especially if they are also the trustee or have appointed a trusted individual or company as the trustee.

Discretionary trusts offer flexibility in terms of asset distribution, decision-making regarding investments, and responses to changing tax laws or family circumstances.

Trusts offer a level of privacy as the details of their operations and assets are not publicly disclosed, unlike companies which have specific public disclosure requirements.

In business ventures, a trust can limit liability to the assets within the trust, protecting other personal or family assets.

Depending on the state in Australia, there may be land tax benefits associated with holding property in a trust.