Definition of Discretionary trust:
That gives a trustee the power to decide which beneficiary receives the funds and up to what amount. The settlor of the trust may (through an informal memorandum or letter of wishes) seek to provide guidance to the trustee but any attempt to restrict trustees discretion invalidates the trust. Since no asset is clearly identifiable with any beneficiary, creditors cannot attach the trust assets in payment of a loan or liability.
A trust in which the number of shares of each beneficiary are not fixed by the settlor in the trust deed, but at the discretion of the trustees.
How to use Discretionary trust in a sentence?
- Trustees for a discretionary trust have what the name implies - the discretion to decide which children should receive capital income, and when.
Meaning of Discretionary trust & Discretionary trust Definition