discretionary trust

  

Definition

That gives a trustee the power to decide which beneficiary receives the funds and up to what amount. The settlor of the trust may (through an informal memorandum or letter of wishes) seek to provide guidance to the trustee but any attempt to restrict trustee's discretion invalidates the trust. Since no asset is clearly identifiable with any beneficiary, creditors cannot attach the trust assets in payment of a loan or liability.

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