Discretionary Trusts

Discretionary Trusts

Discretionary Trusts Explained

A Discretionary Trust is established for the benefit of specific beneficiaries, but it grants the Trustee full discretion in determining how and when funds are distributed to these beneficiaries.
We regard this as an exceptionally adaptable choice, where any child or individual with vulnerabilities assumes the role of a beneficiary alongside other beneficiaries, including other children or grandchildren. It is the trustees who are vested with the authority to determine the timing and manner of distributing capital and income for the collective benefit of all beneficiaries. As part of the comprehensive discretionary trust planning, obtaining a ‘Letter of Wishes’ from the parents to the trustees is vital. This letter serves as a means for parents to articulate their preferences on how the trust should be employed to promote the welfare of their child or children.