When making a will in Wales or England, you may either leave your things directly to people or you can leave them to be held in a Trust.
A part of a Will, a Trust is usually a concept that means you can choose people (Trustee) to hold property and manage them on behalf of another person(Beneficiary). The kind of Trust in a Will, as well as the terms of the Trust, are likely to vary depending on what you would like to achieve.
For any advice related to making Trust Wills visit Net Lawman.
What is a Discretionary Trust in a Will?
The Discretionary Trust Will will be made allowing you to leave behind a part of your estate or the whole of it a Trust established in a Will. You are able pick the individuals whom you would like to act as your trustees and choose the people you would like to benefit from the Trust You proceed to give the Trustees full discretion over which of the chosen potential Beneficiaries receives anything from the Estate, at what time and how thus the name Discretionary Trust.
In normal cases, an individual also prepares a Letter of Wishes, that’s separate from the Will they made, that states the way they would like the Trustees to practice their discretion.
Why Include a Discretionary Trust in MY Will?
There are various great reasons. At the time of coming up with your Will, what if you:
Didn’t have an idea of exactly who you wished to benefit from your estate and by how much?
Only wanted a specific person to acquire it in circumstances only likely to be determined in the future?
Wanted a disabled person without the mental capacity to manage their finances, to inherit the estate.
Wanted a particular person to benefit from the Estate, a huge amount of money could be dangerous for any means-tested benefits they may get and rely on at the moment?
Such kinds of circumstances are usually common, and one way to handle such is to include a Discretionary Trust in your Will. It offers maximum flexibility during the distribution of your estate after you pass on, and gives your Trustees the power to make decisions on your behalf.
Having said that, the person writing the needs to pick a Trustee they believe will heed to the guidance provided through the Letter of Wishes.
An illustration by example:
Assume Mr. Mike is making a Will. He’s got 3 children – Michelle, Charles, and Henry. Unfortunately, Henry is an alcoholic and grapples with gambling problems. Mr. Mike would want all his three children to get an equal share of his Estate but is worried Henry would waste any inheritance he receives due to illness.
So, as a solution to this problem rather than leave his property equally to his children through the Will, he could leave a third to Michelle, a third to Charles, and put a third into Discretionary Trust. Charles, Michelle, and Mike could be named as potential Beneficiaries in the Discretionary Trust.
While making the Will, Mr. Mike would also make a Letter of Wishes addressed to the Trustees he chooses to state that he would like them to give the full inheritance to Henry if He’s fully recovered. But if he’s still ill during his death, then he would want that the Trustee to pay Henry’s share to Charles and Michelle.
The Discretionary Trust allowed Mr. Mike to defer his previous decision on the way his Estate is to be distributed so that the Trustee could decide during his death in the knowledge of the facts during that time.
To learn more about your circumstances and get to know more about using a Discretionary Trust as part of your Will, speak to us and we’ll gladly assist you.