{"id":8313,"date":"2022-11-09T12:00:46","date_gmt":"2022-11-09T17:00:46","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=8313"},"modified":"2022-11-10T14:18:09","modified_gmt":"2022-11-10T19:18:09","slug":"discretionary-distribution-provisions-asset-protection-trusts","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/discretionary-distribution-provisions-asset-protection-trusts\/","title":{"rendered":"Discretionary Distribution Provisions in Asset Protection Trusts"},"content":{"rendered":"

A discretionary distribution provision in an asset protection trust gives the trustee sole or absolute discretion to provide either income or a bequest to a beneficiary. In many cases a discretionary trust provision provides a standard of how distributions of assets will occur. Our team<\/a> has years of experience with Asset Protection Trusts.\u00a0 <\/span><\/p>\n

In a majority of cases the discretionary distribution provisions include the health, education, support and maintenance of a beneficiary.\u00a0\u00a0 When a beneficiary is being sued, or at risk of litigation, the trustee might decide to halt distributions until the matter is resolved. <\/span><\/p>\n

<\/a><\/p>\n

Discretionary distribution provisions protect the assets of the trust from creditors of the beneficiary. They preserve the intent of the settlor in forming the asset protection trust – to protect his assets and distribute them to his heirs, not the creditors of his heirs. <\/span><\/p>\n

There is generally little danger in allowing the trustee this sort of discretionary power. However, there may be some potential pitfalls. For example, if the trustee is, herself, a beneficiary, then giving her the power to distribute trust assets among beneficiaries (including herself) may be tantamount to giving her a \u201cgeneral power of appointment\u201d over the trust assets. Since she can give money to herself, she may be required to do so for the benefit of her creditors. Fortunately, there are ways to minimize this risk.<\/p>\n

<\/a>The discretionary distribution provision might be unlimited:<\/span><\/p>\n

\u201c…the Trustee may, in their sole and absolute discretion, may or apply the whole, any portion, or none of the net income of the Trust to, or in any manner the Trustee deems to be for the benefit of all, or any one or more of the Beneficiaries.\u201d<\/span><\/p>\n

Or, the discretion may be limited by the settlor when he drafts the offshore trust: <\/span><\/p>\n

\u201c…the Trustees may, in their discretion, pay to or apply for the benefit of the Beneficiary, so much of the net income of his separate trust as the Trustees deem advisable to provide adequately and property for the support, maintenance, health, medical care (including, but not limited to, dental, chiropractic, cosmetic, surgical, and psychiatric care), welfare, education (including, but not limited to, private schools, tutoring, college, professional, vocational, language, artistic studies, and other post-graduate education), comfort, and emergency needs of the Beneficiary, and to enable the Beneficiary to Maintain his\/her accustomed standard of living, purchase a home, and\/or invest in purchase, or commence a business venture.\u201d<\/span><\/p>\n

\"Sharper<\/a>
Receive $10 off your order when you spend $100 or more. Enter Coupon Code: AFF10 at checkout.<\/figcaption><\/figure>\n

The purpose of these discretionary distribution provisions is to limit the beneficiary’s right to demand the income or assets of the trust and place decision making and control with the trustee. By so doing, the offshore asset protection trust protects those assets from creditors of the beneficiary. <\/span><\/p>\n

The beneficiary is not the owner of these assets, they are owned and controlled by the trust in the person of the trustee. Because the beneficiary is not the owner of the assets, they can\u2019t be taken from him by a creditor. <\/span><\/p>\n

Conclusion<\/b><\/h2>\n

You may think that your wealth is safe and that you don’t need protection. But don’t delude yourself and accept reality.\u00a0 Discretionary distribution provisions protect the assets of the trust from creditors of the beneficiary.<\/p>\n

If you would like to speak to our lawyers further about Asset Protection Trusts please contact us here.<\/a><\/strong><\/p>\n

Here is probably the most extensive ebook on Everything You Ever Wanted To Know About Eliminating Your Taxes, Protecting Your Assets And Regaining Privacy Over Your Life And Investments<\/i>. It is called The<\/b> Ultimate Guide To Going Offshore<\/b><\/a>.\u00a0 <\/b>Visit our bookstore to purchase it today!<\/p>\n

I hope you got value from this article: Offshore Trusts \u2013 Protecting Yourself From Unjust Malpractice Lawsuits. <\/strong><\/p>\n

Here are some additional articles on offshore trusts, please enjoy!<\/p>\n

The Offshore Asset Protection Trust as a Deterrent to Litigation<\/a><\/strong><\/p>\n

Offshore Tax Planning\u2014The Need of The Hour<\/a><\/strong><\/p>\n

Offshore Trusts: A Guide to Asset Protection Strategies \u2013 Part 4<\/a><\/strong><\/p>\n

The Myths and Reality of Establishing an Offshore Trust<\/a><\/strong><\/p>\n

Offshore Trusts Filing Requirements<\/a><\/strong>
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A discretionary distribution provision in an asset protection trust gives the trustee sole or absolute discretion to provide either income or a bequest to a beneficiary. In many cases a discretionary trust provision provides a standard of how distributions of assets will occur. Our team has years of experience with Asset Protection Trusts.\u00a0 In a […]<\/p>\n","protected":false},"author":686,"featured_media":7856,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"footnotes":"","_jetpack_memberships_contains_paid_content":false},"categories":[9409],"tags":[],"yst_prominent_words":[1761,14716,21960,14576,15842,15839,15837,15838,15836,37580,15841,37582,37579,3961,14715,3083,37583,15840,37581,2817],"acf":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2016\/11\/Offshore-Asset-Protection-Trust-min.jpg","_links":{"self":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/8313"}],"collection":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/users\/686"}],"replies":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/comments?post=8313"}],"version-history":[{"count":7,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/8313\/revisions"}],"predecessor-version":[{"id":46846,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/8313\/revisions\/46846"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media\/7856"}],"wp:attachment":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media?parent=8313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/categories?post=8313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/tags?post=8313"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/yst_prominent_words?post=8313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}