Discretionary trusts


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DISCRETIONARY TRUSTS. Those which cannot be duly administered without the application of a certain degree of prudence and judgment; as when a fund is given to trustees to be distributed in certain charities to be selected by the trustees.

References in periodicals archive ?
A purely discretionary trust is one for which the trustee has unrestricted discretion with regard to: (1) whether distributions are made to the beneficiaries; (2) the amount of any distributions; and (3) the time timing of any distributions.
The article cited the Florida Supreme Court decision in Bacardi that, prior to the enactment of the Florida Trust Code in 2006, controlled the rights of a spouse or former spouse holding a judgment in the form of support resulting from dissolution of marriage against two types of Florida trusts: 1) spendthrift trusts where the trustee has an obligation to make distributions to a beneficiary based upon a stated standard; and 2) discretionary trusts where the trustee has broader discretion whether to make a distribution.
There's no indication that there's any desire from the discretionary trusts to move away from the investment.
Discretionary Trusts Coupled with a Spendthrift Provision.
0504 (entitled "Discretionary Trusts; Effect of Standard") could lead an uninformed attorney and client to the conclusion that trust assets left to a client in a discretionary trust in Florida are protected from even a creditor holding a judgment in the form of support because although the creditor may be an exception creditor and, therefore, able to reach assets in a spendthrift trust, [section]736.
To avoid this, it is worthwhile considering leaving business assets in discretionary trusts on the first death, so that the proceeds of sale are outside the survivor's estate.
This can include discretionary trusts and those which give beneficiaries access to income but not to capital.
The type of trust used will depend on the individual's circumstances and may involve either Discretionary Trusts or Gift and Loan Schemes.
Discretionary trusts can be a very taxeffective means of ensuring ongoing asset protection, where they are set up to hold shares in privately-owned businesses or partnership interests.
Capital Gains Tax (CGT) can also be applicable at a rate of 28% and for discretionary trusts, Periodic and Exit Charges could also be applicable.
Trustees of discretionary trusts should consider distributing income this year rather than next.