What is a discretionary testamentary trust designed to do?

A discretionary testamentary trust is designed to hold assets not in an individual’s name but within a trust, ensuring these assets serve the best interests of designated beneficiaries over time.

This structure goes beyond mere asset holding—it protects wealth and uses strategic tax planning to maximise what’s available to beneficiaries. Additionally, it enables assets to be transferred smoothly across generations without needing to go through probate.

The “trustee” plays a key role here, with the discretion to decide how and when to distribute the trust’s income or capital. Trustees can choose whether funds come from earnings or principal, select which beneficiaries will receive them, and determine the timing, allowing flexibility to accommodate the unique needs of each beneficiary.

This structure provides a robust, flexible approach for preserving and passing down family wealth through generations.