Define "discretionary distribution" in a trust.

A discretionary distribution in a trust refers to distributions made at the trustee's discretion, which means the trustee has the authority to determine when and how much money is distributed to beneficiaries based on the terms of the trust agreement and other relevant considerations. This type of distribution allows for flexibility, enabling the trustee to assess the beneficiaries’ needs, the financial health of the trust, and other pertinent factors before making distributions.

Using discretion can be particularly important in situations where beneficiaries may have varying financial needs or levels of responsibility. The trustee can make decisions that best serve the overall purpose of the trust and the best interests of the beneficiaries, rather than being bound by rigid schedules or predetermined amounts that may not align with the beneficiaries' actual situations.

In contrast, other types of distributions, such as those made on a fixed schedule, based on a beneficiary’s request, or determined by a majority of beneficiaries, do not provide this flexibility and may not allow the trustee to act in the best interests of the beneficiaries as effectively as in a discretionary distribution scenario.