What is a Discretionary Trust?
A discretionary trust, also known as a family trust or trust fund, is a legal arrangement where a person or entity (the settlor) transfers property, assets, or funds to a trustee. The trustee then holds and manages these assets for the benefit of a class of beneficiaries, whose identities and entitlements to the trust income or capital are not fixed. Instead, the trustee has discretion in determining how to distribute the trust's assets among the beneficiaries.
- A Discretionary Trust is a lot like a Will, in that you set out your wishes about your assets and your heirs
- However, a Will only becomes effective when you die and after the probate process. A Discretionary Trust is effective while you are still alive
- Depending on the trust deed, trustees can decide; what gets paid out (income or capital); which beneficiary to make payments to; how often payments are made; and any conditions to impose on the beneficiaries.
At Honey Legal, we can assist you in protecting your family home within a Discretionary Trust, in a way that benefits you and your loved ones, for generations to come.