A Discretionary Trust is a legal agreement that allows a person’s estate to be turned over to a trustee or trustees, who look after it until such time as it can be passed onto a beneficiary.
A Discretionary Trust is often written into Wills to ensure that incapacitated or disabled beneficiaries have their inheritance managed for them by a group of trusted individuals.
Discretionary Trusts are used to put assets aside for a future need, or for a beneficiary who isn’t capable enough to deal with money.
Why Might You Consider A Discretionary Trust?
A Discretionary Trust is useful for a number of reasons.
- The beneficiary cannot gain access to the trust without the trustees acquiesce. This prevents the money in the trust from being squandered by any improvident beneficiaries.
- They are flexible trusts, and can be altered to reflect any changes in circumstance.
- They can prevent family assets from forming part of any beneficiary’s divorce or insolvency
- Putting money in a trust fund can reduce or even eliminate an Inheritance Tax liability.
What Powers Do Trustees Have?
Depending on the terms of the trust, the trustees have a number of powers open to them.
They can decide:
- What gets paid to the beneficiary
- Which beneficiary to make payments to
- How benefits are paid – i.e. as a gift or a loan
- How often payments get made
- Which conditions to impose on the beneficiaries
If you’re worried about how your loved ones will cope after you’re gone, then start preparing for the future by establishing a Trust with Talking Wills. We can help you prepare a Trust that is designed to last for up to 125 years.
We make sure that the right Trust is in place for each client, and give you a range of options without the “lawyer speak” so that you know exactly what to expect from your Discretionary Trust.
Talk to us now on 01925 859 623 to talk about setting up a Discretionary Trust.