Trusts & Future Interests

Question 1

What is a support trust?

Answer 1

A support trust is one in which the trustee is required to pay or apply so much of the trust as is necessary for the support of the beneficiary. The trustee does not have the discretion to refuse to pay bills necessary for the beneficiary’s support.

Question 2

What is a discretionary trust?

Answer 2

In a discretionary trust, the trustee is given discretion whether to apply or withhold payment of trust property to the beneficiary. This discretion limits the rights of the beneficiary to the amounts the trustee decides to give.

The beneficiary cannot interfere with the exercise of the trustee’s discretion unless the trustee abuses their power.

Generally, a court will not interfere unless the trustee has acted in bad faith or dishonestly.

Question 3

When may a trust be revoked?

Answer 3

1. A trust may be terminated by beneficiaries only if all the beneficiaries consent and the modification will not interfere with a material purpose of the trust;
2. A court can terminate a trust prior to the time fixed in the instrument if the trust purposes are accomplished early or the trust purposes to become illegal or impossible to carry out.