A discretionary trust in a Will, often called a discretionary trust, is a legal arrangement set up within your Last Will and Testament. It gives your appointed trustees the authority to manage and distribute assets to beneficiaries at their discretion, rather than following a fixed distribution plan.

Unlike other trusts that name specific beneficiaries with predetermined entitlements, a discretionary trust offers a high level of flexibility, allowing trustees to adapt decisions to suit the beneficiaries’ changing needs and circumstances.

1. Settlor
The settlor (also known as the testator or will-maker) is the person who creates the discretionary trust in their Will. They set out the terms, the assets to be included, and the class of beneficiaries who may benefit.

2. Trustees
Trustees are responsible for managing the trust and deciding how, when, and to whom distributions are made. They are chosen for their judgement, impartiality, and financial knowledge. Trustees must always act in the best interests of the beneficiaries and in line with the trust’s terms.

3. Beneficiaries
Beneficiaries are the people or organisations who may receive assets from the trust. They do not have an automatic right to a specific share; instead, the trustees decide who benefits, in what amounts, and when.

4. Discretionary Powers
The defining feature of a discretionary trust is the power given to trustees to:

• Decide which beneficiaries receive funds or assets.

• Determine how much each receives.

• Choose the timing of distributions.

• Adapt to changes in financial needs, family circumstances, or unforeseen events.

1. Asset Protection
Because beneficiaries have no automatic entitlement, trust assets are better protected from creditors, divorce settlements, and other legal claims.

2. Tax Planning Opportunities
When set up correctly, a discretionary trust can provide inheritance tax benefits, helping to reduce tax liabilities and preserve more of the estate for your loved ones.

3. Flexibility
The trust can evolve over time, allowing trustees to respond to changes in family circumstances, financial needs, or economic conditions.

4. Privacy
The details of a discretionary trust remain confidential, offering greater privacy than other estate planning arrangements.

At Inheritas Wills in Reading, we have extensive experience in drafting discretionary trusts within Wills, ensuring they are tailored to your needs and legally robust. We guide you through the process, helping you safeguard your assets, protect your beneficiaries, and keep control of your legacy long after you’re gone.

Contact us today to discuss whether a discretionary trust in your Will is the right choice for your estate planning.

What is a Property Protection Trust Will?

A Property Protection Trust Will is a legal arrangement designed to safeguard your home and other key assets, ensuring they pass to your chosen beneficiaries – typically family members, while reducing potential risks, such as care home fee assessments or certain inheritance tax liabilities.

By placing your share of a property into trust, you can protect it for your loved ones and ensure it is managed according to your wishes.

1. Trustees
As the will-maker (testator), you appoint trusted individuals, known as trustees, to manage the property held in the trust. They are responsible for ensuring your wishes are followed and that the assets are used for the benefit of your chosen beneficiaries.

2. Beneficiaries
The beneficiaries are those who will ultimately inherit the property or benefit from it. In most cases this will be immediate family, but a PPT Will allows you to include a wider range of people or even organisations if you wish.

3. Property
Usually, the main asset in a PPT Will is your share of your home. This share is placed into the trust, protecting it from being sold or diverted away from your intended heirs under certain circumstances.

• Protection from Care Home Fees
  A key benefit of a PPT Will is the ability to help shield your share of the family home from being used to pay for care home fees, helping preserve its value for the next generation.

• Inheritance Tax Planning
  When structured correctly, placing property into trust can assist in reducing potential inheritance tax liabilities, helping to maximise the value of what you leave behind.

• Preserving Your Legacy
  A PPT Will ensures your home and assets pass to the people you choose, retaining them within the family and safeguarding your legacy for future generations.

Establishing a PPT Will involves several important stages:

1. Initial Consultation: Seek professional advice to ensure the will is tailored to your specific needs and family circumstances.

2. Asset Review: Decide which property or assets should be placed into the trust.

3. Drafting the Trust Document: Work with your solicitor to set out your wishes, list beneficiaries, and appoint trustees.

4. Execution: Sign and witness the trust in accordance with UK legal requirements.

5. Trust Management: Once in place, trustees manage the property in line with your instructions, for the benefit of your chosen beneficiaries.