Discretionary Settlement drafting

Question 1

When will you need one

Answer 1

For a lifetime settlement trust. If the Settlor wants to create a trust during their lifetime to manage and distribute their assets. The settlor can specify how and when the assets are to be distributed and who will manage them.

Question 2

Structure

Answer 2

1) Heading
2) Parties
3) Recitals
4) Definitions
5) Identification of beneficiaries
6) Details of the beneficial interests on which the properties are held
7) Administrative provisions
8) Execution

Question 3

Heading

Answer 3

THIS SETTLEMENT is made the [DAY] of [MONTH] [YEAR]

Question 4

Parties

Answer 4

(1) the Settlor
(2) the Original Trustees

Question 5

Recitals

Answer 5

(1) The Settlor wishes to make the settlement contained below for the benefit of the beneficiaries mentioned below and has paid or transferred into the joint names of the Original Trustees the assets specified in [Schedule 2] of this deed to be held on and with and subject to the following trusts powers and provisions
(2) The Original Trustees have agreed to act as the first trustees of the settlement

Question 6

Definitions

Answer 6

Include things such as:
1) Trustees
2) Trust Fund - sum given under trust fund to be held on trust
3) Discretionary Beneficiaries
ect. - the people receiving the gifts

Question 7

Beneficial Interests - Discretionary trust wording

Answer 7

The Trustees shall stand possessed of the Trust Fund and the income from it on such trusts in favour or for the benefit of all or any one of the Discretionary Beneficiaries as the Trustees (being at least 2 in number or a trust corporation) in their absolute discretion shall at any time or times during the Specified Period see fit

Question 8

Beneficial Interests - Powers of maintenance and advancement wording

Answer 8

The income of the Trust Fund shall during the Specified Period be held by the Trustees upon trust to pay or apply or (in the case of a minor) allocate the same to or for the maintenance support or otherwise for the benefit in any manner of all or any one or more of the Discretionary Beneficiaries for the time being living and if more than one in such shares and in such manner in all respects as the Trustees shall in their absolute discretion think fit

Question 9

Beneficial Interests -
Ultimate trust wording

Answer 9

Subject to all the trusts powers and provisions of this settlement and if and so far as (for any reason whatever) not wholly disposed of by it the Trust Fund and the income from it shall be held upon trust for the [Missions to Seamen]

Question 10

Administration - Charging clause wording

Answer 10

Any of the Trustees who shall be an individual engaged in any profession or business shall be entitled to charge and be paid and to retain all professional or other proper charges for any business done or time spent or services rendered by him or his firm in connection with the trusts powers and provisions of this settlement