🥺
Trusts • Transfer of Interests
TRUSTS#023
Legal Definition
Interests in a discretionary trust are alienable only insofar as the beneficiary ever receives anything. Where they do, an assignee steps into the shoes of the assignor.
Plain English Explanation
The beneficiary of a discretionary trust can transfer their benefits to another person, but it doesn't change the fact that the trustee who controls the trust still has full authority to decide whether or not to ever pay the new beneficiary.
Hypothetical
Hypo 1: Bob is the beneficiary of a discretionary trust. One day, he realizes he forgot to bring money for lunch and tells Sam, "I'll assign all my rights under my trust to you in exchange for a burrito." Sam agrees and purchases Bob a burrito and Bob signs over all of his rights to Sam. Result: Sam is now the beneficiary of the trust, but whether or not he every actually benefits depends on if the trustee decides to pay out funds.
Related Concepts
Are discretionary trusts involuntarily alienable?
Are spendthrift trusts involuntarily alienable?
Are spendthrift trusts voluntarily alienable?
Are support trusts involuntarily alienable?
Are support trusts voluntarily alienable?
What is a discretionary trust?
What is a self-settled spendthrift trust and how do most jurisdictions deal with them?
What is a spendthrift trust?
What is a support trust
