You don’t know what the future holds. Nobody does.
When it comes to creating your Massachusetts estate plan, the uncertainties of life may be reason enough to consider a discretionary trust. This type of estate planning tool can give your chosen trustee much greater flexibility and freedom in distributing income to the beneficiaries.
Discretionary trusts are sometimes called “sprinkling” or “spray” trusts. This refers to the fact that the money can be distributed or sprinkled here and there at will.
Here are a few examples:
- Your spouse’s car stops running unexpectedly. The trustee can choose to give her enough money to buy a new vehicle.
- Your daughter decides to get married. The trustee may decide to use your assets to cover the cost of the wedding.
- Your son enrolls in college. The trustee agrees to pay for your son’s tuition as long as he maintains a GPA of 3.0 or higher.
With a discretionary trust, the trustee also has the power to use his or her judgment to withhold money from any of the beneficiaries. If your child is acting irresponsibly, for instance, the trustee may decide to not distribute any income to him or her.
In addition, the trustee can distribute the income and principal unevenly — giving more to one person and less to another.
Essentially, when you want to give a trustee the power to respond to the unexpected events of life, this legal tool may be a good choice. To learn more about what is right for your particular situation, consider contacting a local estate planning attorney.