When discussing Trusts, here are some terms you may come across:
- Settlor means the person who establishes the trust
- Trustee means the person chosen by the Settlor to manage the assets of trust
- Beneficiary means the person for whose benefit trust assets are held
There are also numerous ways to classify trusts, including by how the trust was created, the object of the trust, whether the trust was created during the settlor’s life or upon the death of the settler, or whether the trust is for a charitable or non-charitable purpose. One of the most common ways to classify trusts is by the Trustee’s discretion.
- In a non-discretionary trust, the Trustee has no discretion with respect to who is to receive the benefits under the trust and how much they are to receive. For example, the Settlor has created a trust that named specific beneficiaries and the proportions or specific amounts that each beneficiary will receive.
- In a discretionary trust, the Trustee is given discretion as to who among a group of people is to receive benefits from the trust or discretion as to the amounts each beneficiary is to receive or both. For example, many parents will specify that the residue of their estate will be held in trust for their children until a specified age but will leave the discretion to the Trustee as to the amounts spent on basic needs, education, for purchase of a home or property, or other expenditure for their benefit.
To find out more about how trusts can fit into your estate plan, call
Doug or
Elizabeth at (604) 980-8571 to set up an appointment.
