What is a discretionary trust and how does it provide asset protection benefits?

A discretionary trust is a type of trust that allows the trustor (person creating the trust agreement) to give the trustee (person managing the trust) the power to decide which beneficiaries will receive the trust’s assets and how much they will receive. This type of trust is useful because it provides flexibility and control over the trust’s assets. In Hawaii, discretionary trusts provide asset protection benefits because they are effective at shielding the trustor’s assets from creditors. This type of trust can be structured so that the beneficiary is not the owner of the trust’s assets, allowing the trustor to remain in control of the trust’s assets. As a result, creditors cannot go after the trustor’s assets directly. Additionally, discretionary trusts provide asset protection benefits in Hawaii because they can be used to protect assets from estate taxes. The trustor can specify that the trust’s assets will pass to the beneficiary without the beneficiary paying any estate taxes. This allows the beneficiary to keep the full value of the assets. Lastly, discretionary trusts can also protect assets from the claims of creditors in the event of the trustor’s death or incapacity. In these cases, the trustor can specify that the assets will be held in trust by the trustee until the trustor’s specified conditions are met. This prevents creditors from attempting to seize the trustor’s assets. Overall, discretionary trusts provide a variety of asset protection benefits in Hawaii, making them a valuable tool for individuals seeking to keep their assets secure.

Related FAQs

What is the difference between asset protection and asset management?
What are the asset protection laws in other countries?
How do I choose a trust protector?
What is the difference between an offshore trust and a domestic trust?
How can I transfer assets into an asset protection trust?
What is a family limited partnership and how can it provide asset protection benefits?
What is a foreign asset protection trust?
What are the differences between a corporation and an LLC?
Are there any limitations on asset protection planning?
What is asset protection planning?

What is a discretionary trust and how does it provide asset protection benefits?

Related FAQs

Related Blog Posts