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.
South Dakota Discretionary Distribution Trust for the Benefit of Trust or's Children with Discretionary Powers over Accumulation and Distribution of Principal and Income refers to a trust structure established in the state of South Dakota. This type of trust allows the trust or, the person creating the trust, to allocate and distribute assets, both principal and income, to their children at their discretion. The trust or has the authority to determine when, how much, and to whom distributions are made, providing flexibility and control over the assets. There are various types of South Dakota 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 depending on the specific needs and goals of the trust or: 1. Irrevocable Discretionary Distribution Trust: This trust becomes irrevocable once it is established, meaning the trust or relinquishes control over the assets. The trust or grants the trustee the discretionary power to accumulate and distribute principal and income to the trust's beneficiaries, their children. 2. Revocable Discretionary Distribution Trust: Unlike the irrevocable trust, this type of trust can be modified or revoked by the trust or during their lifetime. It provides flexibility if the trust or's circumstances or intentions change. 3. Dynasty Discretionary Distribution Trust: This trust is designed to preserve wealth for multiple generations. The assets are held in trust for the benefit of the trust or's children, who also have discretion over the accumulation and distribution of principal and income. By incorporating dynasty provisions, this trust can provide long-term financial security for the family. 4. Special Needs Discretionary Distribution Trust: This trust is specifically crafted for individuals with special needs or disabilities. It allows the trustee to provide supplemental funds while preserving government benefit eligibility, ensuring the beneficiary's quality of life without jeopardizing their assistance. 5. Medicaid Asset Protection Discretionary Distribution Trust: This trust is established to protect the trust or's assets from being counted as resources for Medicaid eligibility purposes. The trustee, under the trust or's discretionary powers, can make distributions for the beneficiaries' care and needs while preserving the trust assets from Medicaid spend-down requirements. The South Dakota 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 provides numerous options for individuals seeking to protect and control the distribution of their wealth for the benefit of their children. These trusts offer flexibility, tax advantages, and the ability to customize based on individual circumstances and goals.
