The beneficiaries are the people (including entities) for whose benefit the trustee holds the trust property. A discretionary trust usually has a wide range of beneficiaries, including companies and other trusts. The beneficiaries of a discretionary trust do not have an interest in the assets of the trust.
Does a Discretionary Trust need more than one beneficiary?
A Discretionary Trust allows your Trustees the discretion and choice to make payments (distributions) to the potential beneficiaries (or category of beneficiaries) named within the Discretionary Trust. If you have only named one beneficiary, then this is NOT a Discretionary Trust.
Can a Discretionary Trust have one beneficiary?
A Discretionary Trust allows trustees greater flexibility when distributing the trust fund; they have the power to distribute the trust fund to either all, some, or just one of the beneficiaries, and in whichever amounts they see fit.
Can a settlor be a beneficiary of a Discretionary Trust?
The Settlor cannot be a trustee and cannot be a beneficiary of the trust, and their spouse and children cannot be beneficiaries. The Settlor is usually a Lawyer or Accountant who helps the client to establish the Discretionary trust. The Settlor has no right to income or capital of the trust assets.
Who are the beneficiaries of a discretionary trust?
Under a discretionary trust, beneficiaries do not have any automatic right to receive the money and/or property held in the trust. Instead, the trustees will decide when to distribute assets or income out of the trust and how much a beneficiary will receive, if anything.
How is income from a trust distributed to beneficiaries?
However, which persons from this group of beneficiaries should receive income from the trust is left to the trustee’s discretion. Choosing the amount and frequency of payments. The trustee is typically given the discretionary power to choose when and how much money, if any, should be distributed among the beneficiaries.
Who are the remainder beneficiaries in a trust?
Remainder or contingent beneficiaries have an interest in the trust after the current beneficiaries’ interest is over. For example, a wife may set up a trust that leaves income to her husband for life (the current beneficiary) and then the remainder of the property to her children (the remainder beneficiaries).
Who are the beneficiaries of an irrevocable trust?
Beneficiaries of an irrevocable trust have rights to information about the trust and to make sure the trustee is acting properly. The scope of those rights depends on the type of beneficiary. Current beneficiaries are beneficiaries who are currently entitled to income from the trust.
