A discretionary trust can add flexibility to your estate plan

 Posted on January 12, 2026 in Trusts

In some cases, people choose to include a trust as part of their estate plan. They may want to set funds aside for a beneficiary, as an inheritance, but they also want to place those funds in a trust so the money is used in a manner they approve of. The beneficiary cannot just spend their inheritance on anything that they want.

At the same time, some people worry that a trust may limit flexibility. For example, if a trust is earmarked for college tuition or other educational expenses, does that mean the beneficiary loses access to the inheritance if they decide not to attend college?

One way to address this concern is by creating a discretionary trust. It can provide both safeguards and flexibility.

How is this different?

A discretionary trust differs from other types of trusts because it does not require the funds to be used for a single, specific purpose. Instead, the grantor gives the trustee discretion to authorize distributions for a variety of reasons. These may include educational expenses, but they can also cover other uses the trustee believes are appropriate, such as purchasing a home, starting a business or paying medical bills.

These trusts can be especially useful when a grantor is unsure whether a beneficiary will use the money responsibly. Rather than strictly limiting all uses of the funds, the grantor appoints a trustee who can evaluate each request and approve distributions that align with the grantor's intentions.

Trusts can be a valuable part of an estate plan. It is important to understand the legal steps involved in setting them up properly.