A discretionary trust is a trust where the beneficiaries and/or their entitlements to the trust fund are not fixed, but are determined by the criteria set out in the trust instrument by trustor. Discretionary trusts can be discretionary in two respects. First, the trustees usually have the power to determine which beneficiaries (from within the class) will receive payments from the trust. Second, trustees can select the amount of trust property that the beneficiary receives. Although most discretionary trusts allow both types of discretion, either can be allowed on its own. It is permissible in most legal systems for a trust to have a fixed number of beneficiaries and for the trustees to have discretion as to how much each beneficiary receives.
A New Jersey Discretionary Distribution Trust for the Benefit of Trust or's Children with Discretionary Powers over Accumulation and Distribution of Principal and Income Separate Trust for each Beneficiary is a specific type of trust established in the state of New Jersey. This trust is created by a trust or (also known as the granter or settler) for the sole purpose of benefiting their children. In this trust structure, the trust or designates their children as the beneficiaries, and each child has a separate trust established for them within the overall framework of the Discretionary Distribution Trust. Each separate trust allows for the accumulation and distribution of principal and income for the exclusive benefit of that particular beneficiary. The primary characteristic of this trust is the discretionary power granted to the trustee(s) over the accumulation and distribution of both principal and income. This means that the trustee(s) have the authority to decide how and when to distribute funds to the beneficiaries, taking into consideration the beneficiaries' needs, financial situation, and any other factors specified in the trust document. Using relevant keywords, the different types of New Jersey Discretionary Distribution Trust for the Benefit of Trust or's Children with Discretionary Powers over Accumulation and Distribution of Principal and Income Separate Trust for each Beneficiary can include: 1. Income Distribution Trust: This trust focuses primarily on the distribution of income generated by the trust assets. The trustee(s) have discretionary powers to determine how much income should be distributed to each beneficiary, considering their individual needs and circumstances. 2. Principal Accumulation Trust: In this type of trust, the trustee(s) have the discretion to accumulate the principal (or the assets) of the trust without distributing it to the beneficiaries. This allows the trust to grow over time, potentially increasing the benefits for the beneficiaries. 3. Combined Principal and Income Trust: Here, the trustee(s) have discretionary powers over both the accumulation and distribution of principal and income. They can decide whether to accumulate both the principal and income, distribute only the income, or make distributions from both. 4. Restricted Distribution Trust: This trust type imposes certain restrictions on the trustee(s) regarding the timing and amount of distributions to the beneficiaries. These restrictions could be based on various factors like the beneficiaries' age, education, health, or specific milestones. The trustee(s) must adhere to these guidelines when making distribution decisions. 5. Special Needs Trust: This trust is designed to benefit a child with special needs and provides for their care and support while preserving their eligibility for government assistance programs. The trustee(s) have discretionary powers over distributions, ensuring that the beneficiary's needs are met without jeopardizing their access to crucial benefits. Overall, a New Jersey Discretionary Distribution Trust for the Benefit of Trust or's Children with Discretionary Powers over Accumulation and Distribution of Principal and Income Separate Trust for each Beneficiary offers flexibility, protection, and control over the distribution of assets, allowing for tailored support and management of the trust funds for the exclusive benefit of the trust or's children.
