Advanced English Dialogue for Business – Discretionary trust

Listen to a Business English Dialogue about Discretionary trust

Gary: Hey Gabrielle, do you know what a discretionary trust is?

Gabrielle: Yes, Gary. A discretionary trust is a type of trust where the trustee has the discretion to decide how and when to distribute the trust assets to the beneficiaries.

Gary: Right, so the trustee has the flexibility to distribute the assets based on the beneficiaries’ needs and circumstances, rather than following strict guidelines?

Gabrielle: Exactly. It offers more control and can be useful for protecting assets and providing for beneficiaries who may not be capable of managing their finances independently.

Gary: That makes sense. So, in a discretionary trust, the trustee holds the power to make decisions in the best interest of the beneficiaries?

Gabrielle: Yes, that’s correct. The trustee’s role is to manage the trust assets prudently and distribute them according to the terms of the trust deed and any instructions provided by the settlor.

Gary: Got it. It sounds like discretionary trusts offer a lot of flexibility and protection for both the settlor and the beneficiaries.

Gabrielle: Absolutely. They can be a valuable tool for estate planning and asset protection, especially in situations where the beneficiaries’ circumstances may change over time.

Gary: Thanks for explaining, Gabrielle. It’s essential to understand how trusts work and their potential benefits.

Gabrielle: No problem, Gary. Trusts can be complex, but they can also provide significant advantages when used effectively in financial planning.