Trusts
Discretionary trusts
When you cannot be sure today what your family will need tomorrow, a discretionary trust lets trustees you choose make those decisions later, guided by your wishes.
- Members of The Society of Will Writers
How a discretionary trust works
Rather than leaving fixed shares, you name a group of potential beneficiaries, for example your children and grandchildren, and give your trustees discretion over who receives what, and when. You can leave a letter of wishes to guide them. No beneficiary has a right to anything until the trustees decide, which is exactly what makes the arrangement flexible.
When people use one
- Beneficiaries who are young, or who may struggle to manage a large sum
- A family member going through divorce, bankruptcy or financial difficulty
- Blended families where needs may change over time
- Grandchildren not yet born
- Where it is sensible to keep options open for tax reasons
Things to consider
A discretionary trust places a lot of trust in your trustees, so choosing them well matters. These trusts also have their own tax rules and reporting duties, and they need some ongoing administration. We will explain all of this before you decide, and point you to a regulated adviser for anything that turns on your personal tax position.
Common questions
Can I tell the trustees what to do?
Not bindingly, otherwise it would not be discretionary, but a letter of wishes is the usual way to guide them and trustees normally follow it closely.
Who should be trustees?
At least two people you trust, ideally with some financial sense. Family members, close friends or professionals can all act.
Does a discretionary trust pay tax?
Discretionary trusts have their own income tax, capital gains tax and inheritance tax rules. We can explain the framework in general terms; specific advice on your position should come from a regulated financial adviser or accountant.
Where we work
Home visits across Norfolk and Suffolk
We are happy to come to you. These are some of the towns we regularly visit.
Ready to talk it through?
Get in touch and we will arrange a time that suits you. We are happy to come to your home if that is easier.