‘Donee’ can refer to the recipient of a gift, or a donee of power: an individual to whom a power of appointment (of assets or items of value) are conveyed, i.e. the power to dispose of someone else’s property.
A donee, in contrast to a trustee, has no obligations or limitations on their power of appointment, meaning they have unfettered discretion.
In the context of a discretionary trust, where the trustee maintains ‘mere or bare powers’, i.e. they are not obliged to distribute the trust assets, the trustee can more accurately be described as a donee. This is because no one has standing to compel the donee to distribute the ‘trust’. However, where fiduciary obligations arise in this type of arrangement, it remains more correct to call the person a trustee.