Discretionary Trust Will

Writing a Will may not be easy but it is something we all have to do particularly in the interest of our loved ones. Though it is important to write wills, it is equally pivotal to draft the one that is most suitable for our beneficiaries. Leaving some of your assets to discretionary trust might just be the perfect option. Discretionary Trust will are one of the best ways to protect the interest of our loved ones against the future. In this article, we will be looking at what is discretionary trust will, the cost of writing one, its examples. Also, we outline discretionary trust will advantage, the clause as well its disadvantage in the UK. Additionally, we will look at what happens in the discretionary trust will clause.

Discretionary Trust Will

After the death and possibly funeral of someone, the next thing people look out for is a will. That of course is if one exists. If there is a will, what type of will is it? While writing a will, it is important to know the type of will you want. You can make out time to speak with a specialist. Will specialists are very helpful at this point. They provide relevant advice and help you adequately analyze your options. It is not just important to write a will, it is also important to write the right one. This will help in apportioning your assets to your dear ones.

What’s your take on designating a system that will provide for the people you love over the years even in your absence? What about making provisions for adjustment to your wills? Discretionary Trust will hold the key to this security. With this, you can be sure the future of your dear ones is saved. Though you will need the help of a Will specialist, the benefits far outweigh the discretionary trust will cost.

It is also known as family trust will. Discretionary means it is discrete. This means the managers of these assets are at liberty to decide how to apportion the assets to beneficiaries. Although trustees have the discrete right, they still act in favour of the beneficiaries.

What is A Discretionary Trust Will

A discretionary trust will is one of the many trust wills available. It is a will that transfers your assets to trust. Mostly, it contains the names of your ideal beneficiaries. It also includes provisions for possible adjustments in future. The trust sets up trustees whose responsibility is to manage the assets. These trustees determine who among the beneficiaries benefits from the trust and what they get. The control and management of assets help trustees to account for changing situations of beneficiaries.

The name “discretionary trust” comes from the fact that no beneficiary knows what to receive from the will. It simply connotes trustees using their own discretion, determines who gets to benefits from the trust. This distinctly differentiates discretionary trust wills from other wills. The settler-only get to include his beneficiaries however, this does not outrightly mean you will benefit from it.

There are about four parties involved in executing this will. They are the settlor, the trustees and the beneficiaries.

Parties In A Discretionary Trust Will

There are four parties to this will.  They are the Settlor, the Trustees, the Appointor and the Beneficiaries.

#1. Settlor

Primarily, the settlor initiates this will. He is the one who desires to put his assets in a trust. He signs the discretionary trust deed and equally pays the settlement sum to the trustees for the benefits of the beneficiaries. Once the settlor signs the trust deed, they no longer own the assets and this limits their control. 

 #2. Trustee

Trustees legally hold and manage assets on behalf of the beneficiaries. However, it does not mean they own the assets. They also have the right to decide who and each beneficiary should get. Generally, trustees are in the interest of the beneficiaries.

#3. Appointor  

The appointor has the sole right to appoint the trustees. Since the trustees decide the proportions of each beneficiary, there is a need to be mindful in choosing an appointer. It is better to appoint joint appointers or even choose an independent appointor. This will ensure transparency in the disbursement of benefits to beneficiaries.

#4. Beneficiaries

The beneficiaries are a set of people who receive benefits from trust wills. The settlor specifies the classes of people who will receive benefits from the trust. Trustees have the flexibility to decide the proportions they get. While the settlor ensures he issues the name or class of beneficiaries in the trust deed. However, a beneficiary name being among the list still does not mean he will receive from the trust fund.

Circumstances That Best Suit A Discretionary  Trust Will

A Discretionary Trust Will  is applicable but not limited to the following situations;  

  • When you are uncertain on how to share your assets to various beneficiaries.
  • Beneficiaries who are incapable of managing their finances.
  • Desire to avoid unforeseen circumstances such as divorce.
  • The need for adjustments.

Discretionary Trust Will Cost

The cost of drafting a functional discretionary trust will vary with firms. Therefore the charges of firm A differs from B. This means the discretionary trust will cost depending on the firm you will employ to do it. This fee does not include the settlement sum.

Typically, firms charge roughly about £1,000 or beyond VAT inclusive to establish one.

You should have a Will specialist set up the trust since it must be legally enforceable, accurate, and precisely written out.

Discretionary Trust Will Settlement Sum

The settlement sum seals the trust will. It gives trustees the authority to effect the will according to their discretion. Once the settlor pays this fee, he losses absolute authority over it. The Settlement sum is only a part of drawing a discretionary trust will cost.

Discretionary Trust Will Clause

Do you intend to leave your will in a family trust? Then ensure you make provision for a clause in case of a discretionary trust will clause. Clauses are a necessary part of a will and require adequate attention. They come up after every expense as well as beneficiaries to a will have been settled. The bills include funeral bills, inheritance tax, accruing debts. Usually, we only consider clauses after setting off bills and bequeathing inheritance to the right beneficiaries. 

What Is a Residual Clause?

Residual clauses refer to what is remaining after clearing the debt and bequeathing inheritance as stated in Wills upon someone’s demise. Usually, it is important to specify who inherit the balance of the dead person’s assets in a will. Making provision for this in your trust deed will enable trustees to effectively handle issues relating to the discretionary trust clause.

Residual Clauses In A Discretionary Trust Will

Are there clauses in discretionary trust Will? Most people only leave a part of their assets to trust not all. This means that the residual clauses are sometimes found in the main will. However, whenever a will does not state who should inherit its residual clauses in cases of a discretionary trust will, trustees will have to decide what to do with the clause. This allows them to account for beneficiaries’ changing circumstances while making payouts, which may differ from those in place at the time the will was written. If the trustees thought it was acceptable, for example, higher distributions could be paid to recipients in greater need. Although, trust protect in the case of any vulnerable beneficiary.

Advantages Of Discretionary Trust Will

The advantages of this will include the following;

#.1 Flexibility

Discretionary trusts allow trustees to adapt to a beneficiary’s changing circumstances on an ongoing basis and throughout their lives. Also, trustees can include the names of people who were not born during the lifetime of the settlor. Such as making provisions for grandchildren. This is possible because provisions were made for their existence in the trust deed.

#2. Deductible Inheritance Tax

The benefits are not the direct property of the beneficiaries. Therefore, we treat it as a separate entity from the beneficiaries without removing IHT

#3. Control and Management

Control and management lie with the trustees. 

Discretionary Trust Will Disadvantages In UK

While we outline the benefits of trust deeds, we will also highlight some discretionary trust will disadvantage the UK

#1. Loss Of  Authority and Control

One major discretionary trust will disadvantage in the UK is the loss of full ownership. Once the settlor signs the trust deed, they no longer own the assets.  This limits their authority and control over the assets. 

#2. Irrevocability Of Trust 

Aside from the loss of full control over assets, revoking trusts deed is another disadvantage of a discretionary trust will in the UK. Once assets are put to trust, they are not easily revocable. This does not mean it cannot be reversed it is however a rigorous process.

#3. Complexity

Drawing up a discretionary trust will in the UK structure is somewhat difficult to design and maintain.

#4. Trustees Lordship

The trustees’ lordship is another disadvantage of the discretionary trust Will in the UK. The trust has the sole right to decide what beneficiaries get, this may not be favourable in some circumstances.

#5. Limited Investment

At times, investors will choose a corporate structure over a trust structure when investing.


A Discretionary Trust Deed gives you the flexibility, control, and security needed in protecting your loved ones. You also get to extend your finances to other people by making provisions in the discretionary trust deed. Since the whole essence of this will is to secure the future of the ones you love, you may as well put it into consideration. As it is way safer than handing your life sweat over to someone who stands the chance of mismanaging it.

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