2) Where a person creates for his own benefit a trust for support or a discretionary trust
, his transferee or creditors can reach the maximum amount which the trustee under the terms of the trust could pay to him or apply for his benefit.
0504(2) means a spouse holding a judgment in the form of support cannot 1) force a distribution from a discretionary trust
for the benefit of the spouse holding the judgment; and/or 2) garnish or otherwise reach or attach distributions from the discretionary trust
before they are in the hands of the beneficiary .
He added: "There is no individual owner, that's the nature of discretionary trusts
- it's a perfectly legal and much-used ownership structure in many different industries, not just football.
A discretionary trust
generally uses permissive language such as the word "may" instead of the word "shall.
It makes certain provisions of the Florida Probate Code inapplicable to trusts and provides that a creditor of a beneficiary of a discretionary trust
may not compel a distribution from a trust or reach a beneficiary's interest in the trust.
Geoff and Irene had chosen a Discretionary Trust
Will, which is particularly popular as a way to cushion the impact of Inheritance Tax.
A Special Needs Trust stipulates which needs are to be satisfied, while a discretionary trust
leaves it up to the trustee's discretion.
The possibilities include: a total discretionary trust
, such as allowing trustees, within their discretion, to pay the income beneficiary trust income and/or trust principal; an inflation adjusted annuity trust; and a unitrust requiring fixed distribution of the trust corpus paid annually.
For instance, The Family Trust, a Pittsburgh-based company founded by the ARC (formerly known as the Association for Retarded Citizens) of Pittsburgh, offers three types of trusts: a pay-back special-needs trust, which pays back the state after the beneficiary dies; a common law or discretionary trust
, and a pooled trust.
Creditor protection is at its greatest in a discretionary trust
because the beneficiary is not entitled to receive distributions and is also unable to control the decision-making process about who may receive distributions.
One of the most efficient ways is to set up a Discretionary Trust
as part of the wills so that on the first death liquid assets can pass into the trust up to the individual's personal allowance (currently pounds 231,000).