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The potential benefits of a discretionary trust

On Behalf of | May 7, 2022 | Trusts |

You know that you’d like to use a trust to leave money to your grandchildren. They are still minors, so you don’t want to leave them the money directly, but you want to make sure that it’s there for them.

The problem is that you don’t know exactly what the future holds. Perhaps one grandchild will want to go to college, so it would be good for them to have an educational trust that can cover the cost of college tuition. But another may decide to start a business and would be better off with a trust that they can use to get the company up and running. Still another grandchild may simply enter the workforce and want to use the trust to buy a family home when they have a new baby on the way.

All these things may not happen for decades, and you’d be happy with any of these outcomes, so how do you make a trust that can be adapted to whatever the future holds?

Giving the trustee control

This is one of the main benefits of discretionary trusts. The person who can use their discretion is the trustee, who you can pick at this time. If you get someone that you trust to make wise decisions that are in line with your overall wishes, then they can analyze the situation at the time that the money is supposed to be dispersed and see how it should be used. You know that it will be used well, in a way that you would approve of, even if you can’t yet know exactly what that will be.

If you’re interested in setting up something like this, just make sure you know what steps to take. Experienced legal guidance is indispensable.