A discretionary trust can prove particularly useful if an individual is uncertain as to how they want to distribute their estate at the time of making their Will, or if there are other eventualities they simply cannot predict. Such a trust means the trustees have complete and inherent discretion as to accumulating income and capital or distributing as and when they think appropriate.
Occasionally parents are faced with extremely sad and challenging situations involving their children battling alcohol, drug or gambling addictions. This may mean that outright distributions to them on death would be inappropriate and ill-advised.
By establishing a discretionary will trust, decision-making as to distributing what, how much, when and to whom is ultimately handed to the trustees.
Charlotte Coyle is a senior associate in the family team and Lilly Whale is an associate in the private client team at Goodman Derrick LLP, the London law firm.
