What is a discretionary trust?

A discretionary trust is a type of trust in New Hampshire that is set up to give a person or entity (often called a trustee) the ability to decide how to distribute money from the trust to one or more beneficiaries. The trustee is given a certain amount of discretion to decide when and how much money to distribute. This type of trust is often used to protect assets from taxes, and it can also be used to provide for a beneficiary’s future needs. Under New Hampshire trust law, the trust document must provide clear instructions on how the trustee should proceed in making decisions about the trust. For example, the trust document will typically specify what types of distributions or investments the trustee may make, and any restrictions or limitations that must be followed. In addition, the law also requires that the trustee’s decisions must be made in a prudent manner and must be in the best interests of the beneficiaries. Discretionary trusts can be useful tools for providing for a beneficiary’s future needs. They allow for flexibility and control in deciding how the trust’s assets are used, while providing protection and security to both the trustee and the beneficiaries. However, it is important to understand the unique requirements of a discretionary trust when creating one in New Hampshire, as they can be very intricate and complex.

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