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The noun DISCRETIONARY TRUST has 1 sense: 1. a trust that gives the trustee discretion to pay the beneficiary as much of the trust income as the trustee believes appropriate. Familiarity information: DISCRETIONARY TRUST used as a noun is very rare.
Discretionary trusts. These are where the trustees can make certain decisions about how to use the trust income, and sometimes the capital. Depending on the trust deed, trustees can decide: what gets paid out (income or capital) which beneficiary to make payments to. how often payments are made.