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Pension-aged Beneficiary of TT

Discussion in 'Estate Planning' started by RobertHolmes, 24th Sep, 2009.

  1. RobertHolmes

    RobertHolmes Member

    Joined:
    10th Nov, 2008
    Posts:
    17
    Location:
    Sydney, NSW
    Dear Community,

    My mother is named as an appointor, trustee and beneficiary of two Testamentary Trusts created by my father's will. The principal beneficiaries of Trust 1 are named as me & my lineal descendants; and Trust 2, my sister & her lineal descendants.

    A clause in the trust deed gives the trustee "discretions as to income & as to corpus....[and] have regard to...Social Security entitlements of a beneficiary..."

    My question is, is this clause sufficient to prevent Centrelink viewing the trusts' assets & income as mum's if she were to apply for the aged pension?

    Cheers, Robert
     
    Last edited by a moderator: 25th Sep, 2009
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Robert,

    Generally trust corpus/assets are separate to an individual, a good example is a superannuation fund which in essence is a trust for the beneficiary's retirement.

    Naturally you should speak to your trust's solicitor and they will go through it with you in more detail.

    Cheers,

    Dan

    PS I am not a solictor and you should seek specialist advice.
     
  3. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    The clause would normally have not effect since it is merely an instruction to the Trustee to consider beneficiaries' individual financial positions when exercising discretion.

    Centrelink will look at the rights of beneficiaries, their influence on the trust, and history of distributions among other things.

    You should talk to an Advisor about other trust details and history to see if this is a problem.

    Cheers,

    Rob