What is a discretionary trust?

A discretionary trust is a legal tool utilized by individuals with disabilities in Virginia for disability planning. A discretionary trust is a type of trust that is established to provide financial support for individuals with disabilities. This trust allows a disabled individual to receive funds from various sources while still qualifying for government benefits such as Supplemental Security Income (SSI) and Medicaid. When a discretionary trust is set up, the individual creating the trust designates a trustee who has authority to use the trust’s funds to provide for the disabled individual. The trustee has the discretion to determine how funds are spent and is responsible for ensuring that the funds are used only for the benefit of the disabled individual. The trustee also has the responsibility of setting a budget for the disabled individual and is responsible for investing and managing the trust assets. The trustee is monitored by a court and must provide reports to the court about the progress of the trust. The main advantage of a discretionary trust is that it allows an individual with a disability to receive financial support while still being eligible for government benefits. This can help the disabled individual to receive funds for their needs while still maintaining their eligibility for government benefits.

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