A discretionary trust is a trust where assets are held in the trust by the trustee, and income or principal are distributed, in the trustee’s discretion, to the beneficiaries for health, education, maintenance and support, among others.
Oftentimes you’ll see language, typically IRS code type language, “reasonable comfort,” typically relating to providing for language that allows the trustee to make discretionary distributions, but doesn’t cause the assets to necessarily be included in the beneficiaries’ estate, for taxable purposes.
Separate language usually establishes the “sole and absolute” discretion of the trustee, without guidance about health education maintenance and support.
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Evaluate your family’s odds of achieving a successful asset transition. Complete the 1O-question Estate Transition Checklist to determine how prepared you and your family are to achieve your asset transition goals.
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Our Personal Estate Planning Priorities Survey, in combination with the Estate Transition Checklist, will help determine your vision and goals for your estate plan and how it is administered by your heirs.
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