What is a discretionary trust?
A discretionary trust, commonly known as a spendthrift trust, is an arrangement in Florida that helps protect a beneficiary’s inheritance from creditors, bankruptcy, and other legal claims. This type of trust is usually set up by a donor, or settlor, who designates the beneficiary of the trust. The trust is managed by a trustee, who is responsible for giving the beneficiary financial support according to the settlor’s wishes. The discretionary trust allows the beneficiary to receive benefits from the trust without having to worry that creditors or other claimants can gain access to the money. The trust also allows the settlor to specify the types of distributions that can be made from the trust, as well as who can receive them, when, and how much. The discretionary trust also allows the settlor to determine how and when the funds will be distributed to the beneficiary, thus preserving the settlor’s wishes for how the money can be used for the beneficiary’s benefit. In addition, the discretionary trust can also help reduce estate taxes, since the funds are held in trust and will not pass directly to the beneficiary. Overall, a discretionary trust in Florida is a useful tool for preserving assets and protecting inheritance for the beneficiary. The settlor has the flexibility to specify how and when the funds will be distributed, thus ensuring that the beneficiary’s interests are taken care of.
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