Should you have any beneficiaries who are vulnerable or you would rather not receive their share of your estate as one lump sum, or not immediately after your death, then a Discretionary Will Trust may be the best estate planning document for you. You are able to express your wishes in such a way that your Trustees will be able to consider them and have the flexibility to carry out those wishes on your behalf. This type of Will Trust will also enable your Trustees to protect your intended beneficiary’s share of the estate from third parties such as spurned spouses or creditors.
A Discretionary Will Trust is where a Testator gives a specific sum or the remainder of their estate to be held by the appointed Trustees who will then make the final decision on who gets what and when. This is particularly useful in the following circumstances.
- Flexibility: The Trustees will be able to consider the beneficiaries’ circumstances after the Testator’s death and should they require their share of the Trust Fund to be ‘drip-fed’ to them or simply withheld so third parties aren’t able to claim upon this share, the Trustees have the flexibility to do this.
- Vulnerable beneficiaries: The Trustees will be able to fully mange a vulnerable beneficiary’s share of the Trust Fund on their behalf and use such finds for their benefit during their lifetime.
- Future generation provision: Should the beneficiary decide it is against their interests to inherit their share of the Trust Fund, or have died before the Testator then a Discretionary Will Trust will allow the Trustees to also protect the issue (children) of that beneficiary and where possible, allow them to benefit from their parent’s share.
- Relationship breakdown of the beneficiaries: If during the period after the death of the Testator, any of the beneficiaries are going through a period of relationship breakdown, whether civil or marital, then the Trustees will be able to withhold that beneficiary’s share of the Trust Fund so it may not be taken into consideration when dividing personal assets.
- Potential benefits to the estate: If an estate is placed into a Discretionary Will Trust, after the Testator’s death, the Trustees will be able to seek if there are any more beneficial options to assist the estate and the beneficiaries. For example, if a new government brings in a more tax-efficient type of Trust or they bring in new rules to help benefit the beneficiaries more, then the Trustees will have the power to move the assets into this new type of Trust should it be more beneficial to the estate and the beneficiaries.
For further information on how a Discretionary Will Trust can help your estate and your beneficiaries in the future, please contact us.