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.
Phoenix Arizona Discretionary Distribution Trust for the Benefit of Trustor's Children with Discretionary Powers over Accumulation and Distribution of Principal and Income Separate Trust for each Beneficiary
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FAQ
Discretionary trusts are sometimes set up to put assets aside for: a future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life. beneficiaries who are not capable or responsible enough to deal with money themselves.
A discretionary trust gives trustees the power to decide how much beneficiaries get from a trust and when they get it. All capital and income is distributed completely at their discretion. This means there's more flexibility and assets can be protected if circumstances change for any reason.
A discretionary trust gives trustees the power to decide how much beneficiaries get from a trust and when they get it. All capital and income is distributed completely at their discretion. This means there's more flexibility and assets can be protected if circumstances change for any reason.
A Discretionary Trust is not exempt from IHT, so there may be an IHT liability on the testator's death, depending on the value of the estate. The trust assets will not be treated as belonging to any of the beneficiaries for IHT purposes. There will be a potential charge to IHT on the trust fund every ten years.
Trust ? advantages and disadvantages limited liability is possible if a corporate trustee is appointed. the structure provides more privacy than a company. there can be flexibility in distributions among beneficiaries. trust income is generally taxed as income of an individual.
A discretionary trust gives trustees the power to decide how much beneficiaries get from a trust and when they get it. All capital and income is distributed completely at their discretion. This means there's more flexibility and assets can be protected if circumstances change for any reason.
A trust is a way of looking after property or money so that it can help a person who is not able to look after the assets for themselves. A discretionary trust is a special form of trust which gives all the decisions about how the assets are looked after and how they are used, to named trustees.
With discretionary distributions, the grantor has given the trustee full discretion to decide which (and when) members of a defined group of beneficiaries are to receive either the income or the principal of the trust or both.
Trust beneficiaries must pay taxes on income and other distributions that they receive from the trust. Trust beneficiaries don't have to pay taxes on returned principal from the trust's assets. IRS forms K-1 and 1041 are required for filing tax returns that receive trust disbursements.
Some of the ways trusts might benefit you include: Protecting and preserving your assets. Customizing and controlling how your wealth is distributed. Minimizing federal or state taxes.