Discretionary Trusts
Starting a trust fund is one way of ensuring your assets are protected when you no longer may be able to. When setting up a trust fund there are various factors which need to be taken into consideration. How your trust is managed is an important decision and the way it is done may greatly affect the eventual outcome of your assets.
Unless you are absolutely certain of how you would like your assets to be distributed and managed then an irrevocable trust may be the best option for you. This means that the trust deeds cannot be altered at all after your death. However, if you or your beneficiaries circumstances are likely to change then a discretionary trust is a much more flexible option.
Unlike an irrevocable trust, a discretionary trust allows trustees the power to alter and adapt the trust in case of changing circumstances. This may prove invaluable for unforeseeable circumstances that are not under your control. For instance, a beneficiary may unfortunately pass away and in this case the assets may be redistributed amongst other people as your chosen trustees see fit. The extent of the trustees' discretion will depend on the terms the settlor has laid out in the discretionary trust deed.
If you would like additional information on discretionary trusts, please see our discretionary trusts explained page. Discretionary trusts have unique tax legislation which can become complex if more than one trust has been set up by the settlor. It may be best to seek the help of an independent financial advisor to make sure that all trust tax returns are filled out correctly:
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