What is a discretionary trust?

A discretionary trust, also known as a spendthrift trust, is a type of trust that is used in Pennsylvania to protect assets and ensure that they are distributed according to the wishes of the trust creator. A discretionary trust puts control in the hands of the trustees who can determine when to release funds from the trust to the beneficiaries. A discretionary trust can be used for many different purposes, such as protecting assets from creditors and providing financial support for family members. In Pennsylvania, a discretionary trust requires a grantor, or trust creator, who gives the trustees the ability to decide how to distribute the trust assets. The grantor will set forth any guidelines the trustees must follow, such as who the beneficiaries are and how much money each beneficiary should receive. The grantor can also choose to limit the trustees’ decision-making abilities by dictating the purchases or investments the trust money must be used for. The trustees can use the trust’s assets in any way they feel best to benefit the beneficiaries. However, they must always respect the grantor’s wishes and keep in mind the purpose of the trust. They must also document any decisions they make and keep accurate records. In Pennsylvania, a discretionary trust can be a great tool to protect and manage one’s assets for future generations. It can provide financial security and help ensure that assets are distributed according to the wishes of the grantor.

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