Discretionary Trust

 

Be in complete control to take care of your family

Many homeowners want to ensure that their home is protected for generations to come. So, understanding how a trust can help protect and manage your home in a way that benefits you and your loved ones, is very important. As experts in different types of Trusts, we can help you do this.

 

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 Genesis Wills and Estate Planning, 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.

 

Discretionary trusts offer a range of advantages that make them a valuable tool in estate planning and asset management.

Here are some key benefits:

  • Avoidance of Probate: By placing assets into a discretionary trust during your lifetime, you can bypass the often lengthy and costly probate process. This means your beneficiaries can access their inheritance more quickly and without the need for a grant of probate. It's important to understand that probate avoidance can only be achieved if the assets are transferred into the trust's name while the testator (the person making the will) is still alive.
  • Long-Term Family Provision: Discretionary trusts allow you to provide for your loved ones over an extended period. The trustee, guided by your wishes, can make distributions to beneficiaries based on their evolving needs and circumstances, ensuring ongoing financial support.
  • Flexibility in Asset Management: The discretionary powers granted to the trustee enable them to adapt to changing circumstances. This flexibility is invaluable when dealing with shifts in family dynamics, financial needs, or tax legislation.
  • Control and Peace of Mind: You retain significant control over the trust. You choose the trustees and define the scope of their powers, ensuring your assets are managed according to your wishes. This can be particularly reassuring if you anticipate potential future incapacity.
  • Tax Efficiency: Discretionary trusts offer opportunities for tax optimization. The trustee can distribute income to beneficiaries in a way that minimizes tax liabilities, taking advantage of lower tax rates and allowances.

 

Setting up a trust can be a complex process, and it’s essential to seek the guidance of a specialist estate planner, to ensure it’s tailored to your specific needs. We make the process as hands-off for you as possible, and provide you with the advice that you need to protect what you love, for those you love.