A Discretionary Trust has the following power:
“The Trustees may by Deed release wholly or in part any of their rights or functions and (if applicable) so as to bind their successors.”
My view is that this power is sufficient for the Trustees to restrict their Discretionary Powers in order for the Discretionary Trust to qualify as a Disabled Person’s Trust moving forward. Does this sound correct?
Thank you.
It would be more normal for a disabled person’s trust to be ‘carved out’ of a discretionary trust by the trustees using their power of appointment (to appoint new or replacement trust provisions for the benefit of any of the beneficiaries). Does such a power not exist in this case? If not, then I can see how it might be possible to achieve a similar result by a careful exercise of the power for the trustees to release their rights and functions but it would require careful thought and drafting.
Paul Davies
Clarke Willmott LLP