What is a Discretionary Trust and How Can it Help Me? Apr 27th
A discretionary trust is one where the beneficiaries and/or their entitlements are not fixed, but rather they are defined by the criteria set out by the trust instrument, which is created by the settlor, who is the trust creator. This type of trust differs from the regular one, which is fixed, as it leaves a lot to the discretion of the trustees, who would be tasked with following the letter of wishes that the settlor recorded and left in their possession. Creating a fixed trust might be fine for the current economic climate, but as we live in a constantly changing society, and a discretionary trust is very flexible, and as the trustees have the settlor’s letter of wishes as a guideline, they can make the appropriate decisions at the right time.
Discretionary Forms
A discretionary trust can be “discretionary” in two respects, the first being that the trustees have discretion over which beneficiaries receive, and secondly, they also have discretion over the assets that are to be distributed. There are established legal firms that specialise in setting up discretionary trusts for their clients, and with their expert advice, you can be sure to make an informed decision on how the trust is managed. Normally, the trustees have the discretion regarding income that the estate generates, but the trust can be created to allow the trustees discretion over the estate assets, should you require this. Trusts are indeed complex, and without the help of an experienced solicitor, it is easy to settle for something that is not as beneficial as it could be.
The Trustees
The trustees of a discretionary trust are given a lot more flexibility, hence the term “discretionary”, and it is up to the settlor to compost a letter of wishes, which clearly outlines the boundaries under which the trustees are bound, and providing the trustees accept the responsibility, their judgement will largely determine the outcome of the estate distribution. It is, therefore, essential that the settlor trusts the trustees implicitly, as they have the power to make important decisions about who receives what.
Seek Legal Advice
If you are considering setting up a trust for your loved ones, it is very important to seek out experienced legal advice, as the world of trusts and estates is indeed very complex, and without sound legal advice, your estate could end up being reduced due to taxation issues. Asset protection should always be at the forefront of your mind when planning for the future, and more information about this can be found at https://www.cunninghamlegal.com/california-legal-services/asset-protection/. However, it’s important to remember that only by enlisting the help of an experienced will and probate lawyer can make the right provisions to ensure ongoing security for your immediate family.
In the unlikely event you have yet to make a last will & testament, there are online experts who can offer the very best advice, especially when it comes to asset protection. If you are ready to record your last wishes in a legally binding document, an online search will put you in touch with a legal expert and with their help, you can rest assured that your family’s future is in good hands.
Apr 27th
A discretionary trust is one where the beneficiaries and/or their entitlements are not fixed, but rather they are defined by the criteria set out by the trust instrument, which is created by the settlor, who is the trust creator. This type of trust differs from the regular one, which is fixed, as it leaves a lot to the discretion of the trustees, who would be tasked with following the letter of wishes that the settlor recorded and left in their possession. Creating a fixed trust might be fine for the current economic climate, but as we live in a constantly changing society, and a discretionary trust is very flexible, and as the trustees have the settlor’s letter of wishes as a guideline, they can make the appropriate decisions at the right time.
Discretionary Forms
A discretionary trust can be “discretionary” in two respects, the first being that the trustees have discretion over which beneficiaries receive, and secondly, they also have discretion over the assets that are to be distributed. There are established legal firms that specialise in setting up discretionary trusts for their clients, and with their expert advice, you can be sure to make an informed decision on how the trust is managed. Normally, the trustees have the discretion regarding income that the estate generates, but the trust can be created to allow the trustees discretion over the estate assets, should you require this. Trusts are indeed complex, and without the help of an experienced solicitor, it is easy to settle for something that is not as beneficial as it could be.
The Trustees
The trustees of a discretionary trust are given a lot more flexibility, hence the term “discretionary”, and it is up to the settlor to compost a letter of wishes, which clearly outlines the boundaries under which the trustees are bound, and providing the trustees accept the responsibility, their judgement will largely determine the outcome of the estate distribution. It is, therefore, essential that the settlor trusts the trustees implicitly, as they have the power to make important decisions about who receives what.
Seek Legal Advice
If you are considering setting up a trust for your loved ones, it is very important to seek out experienced legal advice, as the world of trusts and estates is indeed very complex, and without sound legal advice, your estate could end up being reduced due to taxation issues. Asset protection should always be at the forefront of your mind when planning for the future, and more information about this can be found at https://www.cunninghamlegal.com/california-legal-services/asset-protection/. However, it’s important to remember that only by enlisting the help of an experienced will and probate lawyer can make the right provisions to ensure ongoing security for your immediate family.
In the unlikely event you have yet to make a last will & testament, there are online experts who can offer the very best advice, especially when it comes to asset protection. If you are ready to record your last wishes in a legally binding document, an online search will put you in touch with a legal expert and with their help, you can rest assured that your family’s future is in good hands.
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