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.

A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.
References in periodicals archive ?
But, if the home is left to a discretionary trust, even if the beneficiaries are direct descendants and they end up with the property, the deceased's estate will not qualify for the RNRB.
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.
The draft of the Third Restatement takes a dramatically different position with respect to the creditor protection available to a beneficiary of a discretionary trust. The Third Restatement provides that regardless of how the discretionary trust is worded, if the settlor's purpose is to provide for the beneficiary's needs, and if it is acceptable social policy that the beneficiary not be left without support, then the trustee would be subject to a general standard of reasonableness in determining whether a distribution should be made to a beneficiary.
A discretionary trust is one where the trustees have more discretion over how they distribute income and capital, perhaps in meeting school fees for example.
The Restatement Second distinguishes discretionary trusts from spendthrift trusts as follows:
"Furthermore, if income is not being distributed from a discretionary trust, then it will be taxed at up to 50%.
Many married couples/civil partners made Wills which were designed to utilise the Nil-Rate Band on first death by putting its value into a Discretionary Trust.
Discretionary trusts can be used if you want to set levels for how much income or capital to pay or pass to each of the beneficiaries, and when.
A popular scheme is for couples to make wills incorporating "nil-rate discretionary trusts".
The type of trust used will depend on the individual's circumstances and may involve either Discretionary Trusts or Gift and Loan Schemes.
For those contemplating MAKING sizeable gifts, the use of "nil rate discretionary trusts" during lifetime or through their wills can still play an important role.