What type of trust is described by terms that allow distributions to the beneficiary only at the trustee's discretion?

• A. Discretionary trust
• B. Spousal trust
• C. Protective trust
• D. Totten trust

Answer: (A)

Discretionary trust. Here, the trustee holds the power to decide whether to make distributions to the beneficiary, and if so, how much and when. The beneficiary generally has no fixed right to income or assets; payments depend on the trustee’s judgment and the trust terms. This contrasts with a spousal trust, which is structured to benefit a spouse under particular conditions; a protective trust, which emphasizes safeguarding assets for the beneficiary (often from creditors) while permitting some distributions; and a Totten trust, which is a payable-on-death arrangement where the beneficiary’s rights arise only after the account holder’s death and decisions aren’t made by a trustee during the holder’s lifetime.