A discretionary trust is a trust where the beneficiaries and/or their entitlements to the trust fund are not fixed, but are determined by the criteria set out in the trust instrument by trustor. Discretionary trusts can be discretionary in two respects. First, the trustees usually have the power to determine which beneficiaries (from within the class) will receive payments from the trust. Second, trustees can select the amount of trust property that the beneficiary receives. Although most discretionary trusts allow both types of discretion, either can be allowed on its own. It is permissible in most legal systems for a trust to have a fixed number of beneficiaries and for the trustees to have discretion as to how much each beneficiary receives.
Ohio Discretionary Distribution Trust for the Benefit of Trust or's Children with Discretionary Powers over Accumulation and Distribution of Principal and Income is a type of irrevocable trust established in the state of Ohio. This trust serves as a financial tool for the preservation and controlled distribution of assets to beneficiaries, primarily the children of the trust or. The trust grants the trustee discretionary powers over the accumulation and distribution of both principal and income, providing flexibility and protection for the beneficiaries. This trust can be structured with separate trusts for each beneficiary, ensuring that the assets are managed and distributed according to each individual's needs and circumstances. By creating individual trusts, the trust or can tailor the distribution rules and structure to match the unique requirements of each beneficiary. This enhances the ability to meet specific financial goals and adapt to changing circumstances over time. The Ohio Discretionary Distribution Trust may have various types, such as: 1. Education Trusts: These separate trusts are established to cover the educational expenses of each designated beneficiary. The trustee holds discretion regarding the accumulation and distribution of funds to fulfill educational needs such as tuition fees, books, accommodation, and related expenses. 2. Medical Trusts: In this variant, a separate trust is created for each beneficiary, with the primary purpose of covering medical expenses, healthcare services, and related costs. The trustee has discretionary powers to accumulate and distribute funds to ensure the beneficiary's medical needs are adequately met. 3. Support Trusts: These separate trusts focus on providing support and maintenance for each beneficiary. The allocated funds can be utilized for general living expenses, housing costs, utilities, transportation, and other necessities. The trustee exercises discretion over the accumulation and distribution of principal and income to ensure the beneficiary's continued well-being. 4. Discretionary Trusts: A discretionary distribution trust, in general, grants the trustee discretionary powers to determine the timing, amount, and frequency of distributions to beneficiaries. In this context, separate discretionary trusts are established for each beneficiary, allowing the trustee to make personalized decisions based on individual circumstances, financial needs, and any other specified criteria. The Ohio Discretionary Distribution Trust for the Benefit of Trust or's Children with Discretionary Powers over Accumulation and Distribution of Principal and Income Separate Trust for each Beneficiary offers a comprehensive and adaptable framework for managing assets and providing for the financial needs of the trust or's children. It harmonizes flexibility with effective long-term asset protection and allows the trust or to customize the structure to cater to the specific requirements of each beneficiary.
