WWW.LAWYER-MONTHLY.COM 55 provide for the gradual passing of wealth to future generations. Other attractive characteristics of a discretionary trust structure may include asset protection from creditors or other third parties. This can be particularly beneficial for settlors in safeguarding the financial interests of vulnerable beneficiaries for whom the settlor would ultimately lie to benefit. An example, may be a child exposed to financial claims form creditors or potential family claims. How can different types of trust structures, such as discretionary and fixed trusts, be utilized in Ireland to achieve specific estate planning goals and safeguard assets? The most common types of trusts in Ireland are: Discretionary trusts: where the trustees hold the trust fund for the suitably structured, this control can continue after the death of the surviving general partner. The limited partners, typically children and / or grandchildren hold a valuable economic interest, but are not permitted to participate in the management of the limited partnership. The family limited partnership can also be more flexible in capital tax terms than a trust or a holding company, and the limited partners have income and capital benefits within their ownership, although the limited partnership assets are not within their control. From a tax perspective, as income and capital gains are taxable on the partners in proportion to their interest in the limited partnership assets, a double layer of tax is avoided. The use of discretionary trusts can also be an effective investment vehicle for asset protection / wealth preservation for high net worth individuals. They tend to be used for legal reasons rather than being motivated by tax concerns. They can be particularly effective for managing assets for minor beneficiaries, or beneficiaries who may not otherwise be able to manage wealth themselves, due to lack of mental capacity or other reasons, where the trust structure can Discretionary trusts are effective for managing assets for minor or vulnerable beneficiaries, allowing gradual wealth transfer.
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