Discretionary Trust Wills

Ian Winterbotham explains what we need to know about a discretionary trust will.

Protect Your Assets

You may be worried, when drawing up your Will, that the assets you leave after your death may be lost or squandered. There could be many reasons for this concern.

One solution is to set up a discretionary trust Will, which adds a layer of protection to your estate if you think your beneficiaries will not manage their inheritance wisely.

What is a Discretionary Trust Will?

If you decide on a discretionary trust Will, this creates a Trust that becomes active after your death.

You can view a Trust as a safety deposit box into which you place all your assets, such as your home, savings and investments.

The only people who have access to those possessions are the trustees you appoint. They effectively hold the keys to your safety deposit box, and their job is to ensure your chosen beneficiaries receive their inheritance in due course.

When you draw up a discretionary trust Will, you decide who those beneficiaries will be, just as you would with a standard Will. They may be family, friends, charities or other organisations you want to support.

Reasons for Making a Discretionary Trust Will

You may have a variety of concerns that make a discretionary trust Will the right choice for you.

1. Divorce: You may be concerned that one or more of your children may split up with their partner after your death – in which case they might lose a large part of their inheritance in the settlement. With a discretionary trust, your assets are preserved for your own bloodline.
2. Bankruptcy: If you fear your children are at risk of bankruptcy, the money you leave them will be kept separate from any court assessment.
3. Addiction: People in your family may have problems with alcohol, drugs, gambling or other addictions. A discretionary trust imposes a measure of control over their inheritance.
4. Medical vulnerability: You may have reason to fear your descendants are liable to lose mental capacity owing to certain medical conditions. Any poor decisions they make will be less expensive if their assets are in a Trust.

Choosing Your Trustees

As you can see, it is important that you appoint the right people to administer your trust. You might choose your partner, your children, or a close friend or professional acquaintance.

What matters is that they are people you trust to carry out your wishes in the best interests of the people you want to benefit from your assets.

To make your intentions perfectly clear, you can also write a letter of wishes spelling out how you wish the trustees distribute your assets. 

When the time comes to share out the proceeds of your estate, all the trustees will need to be present and will need to sign documents so that assets can be distributed.

A discretionary trust set up by your Will can last for 125 years for the benefit of your children, grandchildren and even great-grandchildren.

However, if your beneficiaries and trustees agree that the trust is no longer needed, it can be discontinued sooner than that.

Ask Us About a Discretionary Trust Will

If you feel that you and your descendants might benefit from a discretionary trust Will, it is time to discuss your requirements with us at Will Power.

Contact us and one of our trained, experienced consultants will talk through your potential next steps, and the way in which setting up a trust to become active after your death might be right for you.