• Jonathan Walker

What is a Discretionary Trust?

Updated: Dec 2, 2018

How does it work?​

A Discretionary Trust can help you protect and manage the inheritance of vulnerable or disabled Beneficiaries without affecting what they are legally entitled to.

What will happen if this Trust is not written in your Will?

If your disabled Beneficiary eventually resided in a care home and received funding for this care, any inheritance could mean that funding would cease and future care would have to be paid for out of inheritance.

Any means-tested benefits could also be affected.

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

  • Any conditions to impose on the beneficiaries

Discretionary trusts are sometimes set up to put assets aside for;

  • A future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life.

  • beneficiaries who are not capable or responsible enough to deal with money themselves.

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