Notes
To establish a family discretionary trust a settlor must make a gift of the settled sum to the trustee.
Payment of the settled sum to the trustee is important as the gift by the settlor of the settled sum is the event that creates the family discretionary trust.
The trustee continuing to keep and secure the settled sum is how trust property is maintained so the trust does not vest even if the trust goes into negative equity. A government authority or, especially, a lender can ask the principals to show and verify that the trust was established by the gift of the settled sum and that the settled sum is retained.