A Discretionary Will Trust is a powerful and flexible estate planning tool designed to protect your assets and adapt to changing family circumstances. Rather than leaving assets directly to beneficiaries, this type of trust places them under the control of appointed Trustees, who manage and distribute the assets in line with your wishes after your death.
The Trust only comes into effect when the testator passes away. At that point, the assets placed into the Trust are held by the Trustees, who have full discretion over how and when those assets are distributed. This flexibility can be invaluable when beneficiaries’ needs, circumstances, or financial situations may change over time.
When a Discretionary Trust is included within a Will, the testator names a group of potential beneficiaries rather than fixed entitlements. These beneficiaries do not have an automatic right to receive assets. Instead, the Trustees decide whether to retain assets within the Trust or distribute some or all of them, based on the circumstances at the time.
To guide the Trustees, a Letter of Wishes is usually prepared. While not legally binding, this document clearly sets out the testator’s intentions and preferences, helping Trustees make decisions that reflect your wishes.
A Standard Discretionary Will Trust is often considered by individuals who:
Have concerns about how beneficiaries may manage inherited assets
Want flexibility to account for future changes they cannot foresee
Have complex family arrangements
Wish to protect assets for future generations
Want Trustees to respond to changing financial or personal circumstances
It is particularly attractive where certainty today may not be appropriate for tomorrow.
If you pass away without a Will, your estate is distributed according to strict legal rules known as intestacy. These rules may not reflect your wishes and could leave loved ones without provision. Important decisions may also be taken out of your family’s hands. Including a Will — and where appropriate, a Discretionary Trust — ensures your estate is handled on your terms.
The Trust is controlled by the Trustees you appoint in your Will. They are responsible for managing the Trust assets and deciding when and how beneficiaries should benefit. Choosing reliable and trustworthy individuals is essential.
No. Beneficiaries of a Discretionary Trust are considered potential beneficiaries. They do not have an automatic entitlement. Any distribution is made entirely at the discretion of the Trustees, guided by your Letter of Wishes.
