Wills, Trusts, and Estates

Discretionary Trust

In a discretionary trust, the trustee has discretion over how the property is distributed, but must still exercise this discretion prudently, in good faith, and in accordance with the terms of the trust in light of the needs and circumstances of the beneficiaries.

A discretionary trustee has a duty to inquire into the beneficiaries' finances so he can determine whether a distribution is needed or not.