What is a discretionary trust deed?
It is a legal document that establishes a trust in which the trustees have discretion over how and when to distribute income or assets among a class of beneficiaries.
Estate & Legacy Planning
Discretionary Trust Deed
Generate a discretionary trust deed giving trustees flexibility over distributions, drafted with regard to the relevant property regime for UK inheritance tax.
- Create a discretionary trust deed for family assets
Create a discretionary trust deed establishing [Trust Name], with [Settlor Name] as settlor and [Trustee Name(s)] as trustees, for the benefit of [Beneficiary Names], covering assets including [Key Assets].
- Create a discretionary trust deed for business succession planning
Create a discretionary trust deed establishing [Trust Name], holding shares in [Business Name] on behalf of [Beneficiary Names], with [Trustee Name(s)] as trustees.
- Create a discretionary trust deed including an appointor role
Create a discretionary trust deed establishing [Trust Name], naming [Appointor Name] as appointor with the power to remove and replace trustees, and [Trustee Name(s)] as trustees for [Beneficiary Names].
Discretionary Trust Deed Generator (UK)
A discretionary trust deed is a legal document that establishes a trust in which the trustees have discretion over how and when to distribute income or assets among a class of beneficiaries. This free UK discretionary trust deed generator produces deeds for family asset holding, business succession planning, and structures that include an appointor role, drafted with regard to the Trustee Act 2000 and the fact that most UK discretionary trusts fall within the relevant property regime under the Inheritance Tax Act 1984, which can trigger entry charges, ten-yearly periodic charges, and exit charges. It is designed for UK families and business owners setting up a trust structure with the help of their solicitor or accountant. The generator lets you name the settlor, trustees, beneficiaries, and an optional appointor, and describe the assets to be held. Use it as a starting point before finalising the structure with tax and legal advice, since the inheritance tax consequences of a discretionary trust are significant.
Frequently asked questions
How is a discretionary trust different from a fixed trust?
In a fixed trust, each beneficiary's entitlement is set in advance. In a discretionary trust, the trustees decide who receives what and when, within the terms of the deed.
Who are the key parties in a UK discretionary trust deed?
The settlor establishes the trust, the trustees manage it under the Trustee Act 2000, and the beneficiaries are the people who may benefit, often alongside an appointor who can remove and replace trustees.
Does a UK discretionary trust pay inheritance tax?
Most discretionary trusts fall within the relevant property regime under the Inheritance Tax Act 1984, which can mean an entry charge on setting up the trust and periodic and exit charges roughly every ten years.
Why do UK families and businesses use discretionary trusts?
They are commonly used for asset protection and flexible succession planning despite the inheritance tax regime, since trustees can adapt distributions to changing family or business circumstances.
Does a discretionary trust deed need to be reviewed by a solicitor?
Yes, given the significant inheritance tax and family implications, independent legal and tax advice is strongly recommended before finalising a trust deed.