These trusts benefit more than one person and the trustees are given the power to make decisions as to how and when those people benefit. They are useful where the creator of the trust (the settlor) has identified a group of people who he or she wishes to benefit, children for example, but is not certain which of them will require financial help in the future. The settlor can, therefore, provide a degree of financial security for their family and protect the family wealth via a discretionary trust. A discretionary trust has lots of practical and financial benefits:
- it can control when money and property will be paid out. This can ensure children and/or disabled and vulnerable people receive some financial support from the trust fund but do not have full access to it. This is particularly helpful if an adult child divorces or is irresponsible with money;
- monies and property paid into a discretionary trust created during the settlor’s lifetime can be paid to the right beneficiaries quickly without the need to obtain probate; &
- discretionary trusts can be used to ensure that money paid out from a life policy does not form part of the deceased’s estate for inheritance tax purposes.
A discretionary trust can offer parents and grandparents peace of mind as regards to the financial well-being of future generations of their families.
For anything further, one of our specialists would be delighted to meet you either in our office or in your own home to talk through your requirements and answer any questions. Please contact us at any time.