As the name implies, discretionary trusts let the trustees use their discretion when it comes to distributing the assets that have been placed in trust. This could be cash, investments, property or a combination. The trustees can pay or dispose of the assets to the named beneficiaries as they see fit, provided they comply with the terms of the trust.

You can put a discretionary trust in place during your lifetime, or after your death as part of your will. If the trust is created during your lifetime, you’ll lose control of your assets. Usually, you’d include a Letter of Wishes with the trust which tells the trustees how you’d prefer them to deal with your assets, but this isn’t legally binding.

Why create a discretionary trust?

A discretionary trust gives you more flexibility and control over how your assets are distributed. Typical scenarios include:

  • Enabling a disabled child to inherit more money than their siblings to cover care fees
  • Preventing a ‘wayward’ child from inheriting money or property
  • Enabling grandchildren to inherit as well as or instead of surviving children
  • Making sure beneficiaries on means-tested benefits can keep receiving them.

Contact Colin today to book a free, no obligation appointment to discuss your trust requirements.