The beneficiary class

What a discretionary interest is

Beneficiaries in a discretionary trust hold a mere expectancy. They may receive something. They cannot demand anything specific. All of that is the trustee judgment. That distinction between an expectancy and a right is the mechanism: there is nothing fixed for a creditor to attach.

Why it cannot be attached

A creditor can attach an asset the debtor owns or has a right to receive. A discretionary interest is neither. The beneficiary owns nothing and has no enforceable right. A court order directing a beneficiary to hand over their interest cannot be satisfied because there is nothing to hand over.

Who to include

Draw broadly. The standard approach names the settlor, spouse, children, remoter issue, and often a charity, with a power to add further beneficiaries. A narrow class constrains the trustee in ways that may not serve the trust over decades and carries no compensating benefit.

Can the settlor benefit

Yes, and in US asset protection planning they usually are named as a discretionary beneficiary. The settlor interest remains discretionary, not proprietary, so creditors face the same hurdle as for any other beneficiary.

Adding beneficiaries later

Most deeds include a power for the trustee or protector to add beneficiaries by deed. Include it for flexibility. It does not require formal amendment to the trust deed itself, provided the power already exists.

See letter of wishes for distribution guidance.