Flex Your Wishes as Things Change

What are Discretionary Trusts? Well, they’re a type of Wills Trust that differ from other types of Trusts in one major way: they have flexibility.

Normally, a Trust is set up with fixed instructions on how the assets are handled, but a Discretionary Trust allows the Trustees to adapt as situations change. It’s useful if you want your assets to be distributed dependent on the Beneficiaries’ situation at the time.

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What is a Trust?

A Trust is a way to maintain control over your assets and how they’re handled after you’re gone. You’ll have control over who has access and distributes your money, your property, and other valuables, meaning you can safeguard them from the wrong people.

This differs from simply leaving your assets in a Will, as you lose all control over your assets once they’re inherited by your Beneficiary.

Find out more about Trusts and their benefits on our Trusts page here.

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Protect your assets from certain fees and Taxes.

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Maintain control over how your assets are used.

How does a Discretionary Trust work?

A Discretionary Trust differs from a Wills Trust because it allows the Trustees more flexibility in how they manage and distribute the assets within the Trust. You hand over some of the decision making to them, whilst still being able to express your wishes and any guidelines within the Trust itself by writing a “letter of guidance”.

This type of Trust is useful if you’re unsure how things will pan out in the future, or you’d rather the distribution of assets to be adaptable to your Beneficiaries’ situation.

The Settlor


Deposits their assets in the Trust for safekeeping, and appoints the people who will manage it.

The Trustee


Manages the Trust, and distributes the assets at their discretion and within the Settlor’s guidelines.

The Beneficiary


Has access to the assets, and benefits from them when the Trustee and guidelines allow.

A key part of a discretionary Trust is that there should be multiple potential beneficiaries who can benefit from it. Only naming a couple of beneficiaries may be fine, at first, if the intention for the Trust is that it’s distributed out fairly quickly after the testators death.

However, cracks may start to show when the Trust carries on over a longer period and beneficiaries die, leaving only 1 – this is no longer truly a discretionary Trust, and for tax purposes it would be treated as either a bare Trust or an Interest In Possession. This is why we always recommend choosing more than 1 beneficiary when creating this Trust type.

When will a Discretionary Trust be the best option?

There are many reasons why a Settlor may choose a Discretionary Wills Trust, and as everyone’s situation is different, it’s important to really think about what would work best for you. Handing some discretion over to your Trustees can be a good idea if your Beneficiaries may need additional support in handling any of the assets within the Trust for any reason. This could be due to a disability, addiction, or even the age of the Beneficiaries.

To see what would work best for you, speak to one of our friendly team who will be able to advise you on your options, and which would help you make the most of your assets.

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You want to cover any future children in the family even after you’re gone.

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You have a Beneficiary who doesn’t have the capacity to manage their finances.

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You’re concerned a Beneficiary won’t make good choices with the assets.

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You have Beneficiaries who aren’t old enough to inherit from your estate yet.

How Can a Trust Help me Protect my Assets?


Choose exactly who has access to your assets.


Enjoy your privacy – Trusts aren’t public documents, unlike Wills.


Save on inheritance tax – don’t let your loved ones lose out.


Provide better financial support for your dependants’ futures.


Give your loved ones quicker access to their inheritance when you’re gone.


Gain better flexibility over how your assets are managed in the long-term.

The Trusts we offer are an optional addition to our Bespoke Will service. Click here to find out more about Bespoke Wills.

Who Can I Appoint as a Trustee?

You’ve got to make sure that no matter what type of Trust you’re creating, you choose responsible and reliable Trustees. All Trustees (and there can be more than one per Trust) must meet the following criteria:

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They must be at least 18 years of age.

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They can be a family member, friend or professional acting on your behalf.

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If you’re creating a Trust which will be effective whilst you’re alive, you can be the Trustee.

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You must be confident that they have the best interests of the Beneficiaries at heart.

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We advise you to choose at least 2 Trustees, but no more than 4. Make sure there’ll be no tension between the Trustees.

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If you’d rather have someone outside of your family be a Trustee, you can appoint a professional such as a solicitor, Trust company or accountant.

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They’ll need to fully understand the responsibility of managing the Trust on your behalf.

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It’s a good idea to name substitute Trustees, to replace a Trustee should anything happen to them.

Discretionary Trust Case Study

A Trust can include any wishes about how your estate should be handled by the trustee, and you are able to express more complex wishes in how you’d like your estate to be managed.

Heather and Mark have 3 children and 5 grandchildren. They have several properties and a large nest egg that they’d like to distribute between their children and grandchildren after they’re gone. Only 2 of their children currently have families themselves, and they’re all named as Beneficiaries in Mark and Heather’s Wills Trust.

After Heather and Mark die, the Wills Trust comes into play, and their children and grandchildren all have access to the assets within the Trust. However, their third child then goes on to have a family of their own, but their kids aren’t automatically included as Beneficiaries in the Trust so they don’t get the same access as their cousins to the assets in the Trust.

This causes some animosity within the family, as there’s a feeling of being left out. Beneficiaries can’t be added onto a Trust once the Settlor has died, so there’s no easy fix to the situation.

How would a Discretionary Trust Help?

If Heather and Mark had opted for a Discretionary Trust over a standard Wills Trust, the Trustees could have chosen to make provisions to new grandchildren within the family. They would have been able to add them into the list of Beneficiaries if the Letter of Wishes made allowances for this. By choosing this option, all of the grandchildren would have had equal access to the Trust and felt as if they were being treated fairly, avoiding any family arguments.

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  • Yes, you can! You can be both a Trustee and a Beneficiary, for example. To find out how best to plan your Trust, get in touch with our specialists who will guide you through your options.

  • This document supports the Trust Deed and outlines your wishes for the assets placed within the Trust. Although not legally binding, it gives guidance to the Trustees on how you’d like your Trust to be executed on your behalf. You can update this as often as you want without having to amend the Trust Deed itself.

  • When the Beneficiary of a Trust dies, the Trust is then “wound-up”. When creating your Trust Deed, you should name back-up Beneficiaries to inherit any assets which remain in the fund if the original Beneficiary dies. This can be family, friends or even charities.

  • It depends on the type of Trust. If the Trust Deed states that they can’t access funds before a certain age, or must meet a set of requirements, then it’s unlikely that assets will be released early without very good reason.

    If the Deed states that the Beneficiary can have discretionary access to the Trust at any time, then the Beneficiary will need to formally petition the Trustee. The Trustee then decides whether to release the funds.

  • It depends on the type of Trust. Some types of Trusts are tax exempt, or are only subject to charges if they’re over a certain value. There are three main tax implications to consider when creating your Trust, including:

    • Income Tax
    • Capital Gains Tax
    • Inheritance Tax

    To find out more about how taxes can affect you, and how to protect your funds as much as possible, just get in touch.

  • No, you can also put companies, stocks and other valuable assets into a Trust. It’s not limited to money and property.

  • Only you, the Trustee, and any Beneficiaries are able to see the Trust documentation. Unlike Wills and some other legal documents, Trusts aren’t made public, even after death. It’s another benefit of using Trusts alongside or instead of a Will, as the contents remain private at all times.

  • With so many types of Trusts available, it’s difficult to know where to start. That’s why we’re here to listen to your personal circumstances and wishes – then, we can guide you towards the best Trust for you. With so many complexities, you need to seek the advice of a specialist to avoid any unwanted issues.