How does one go about setting up a discretionary trust?

It depends on what assets your are planning on putting in trust. If you are investing money, for example, investment companies will have their own discretionary trusts that you will be able to use for free. For anything else, as Platinum has said, you'll need to speak with a solicitor to draw one up. Contrary to the other comment, it needn't be expensive to draw up a trust.

You may have to be careful with entitlement to means-tested state benefits though. You may have an issue with so-called 'deprivation of assets' i.e. deliberately reducing one's assets in order to become eligible for some means-tested benefits - which isn't allowed. A good solicitor or even Independent Financial Advisor will guide you through the issues.

You would need to speak to a solicitor, who can make the relevant legal arrangements and also advise on tax benefits.

For a list of solicitors in your area, contact the Law Society for the relevant part of the UK - either contact@lawsociety.org.uk for England or Wales, lawscot@lawscot.org.uk for Scotland, or info@lawsoc-ni.org for Northern Ireland.

Until the amounts of money involved (eg the value of property put into trust) reaches multi-100 thousands, the costs are likley to exceed any Tax benefits ..