A child maintenance trust (CMT) is a trust set up as part of a breakdown in a relationship. The trust is set up to benefit the children of the relationship. But it can benefit the whole family because the minor children can be taxed as adults on the income of the trust. if they receive income it will be taxed at adult tax rates under s102AG ITAA36 This is very similar to the way children are taxed with income from testamentary trusts These trusts work like this One or both parents gift assets to the trustee of a discretionary trust – the trust must be set up in a way so that upon vesting the capital of the trust passes to the children of that trust. Other beneficiaries of the trust can benefit from the income, but only children from the capital. The income from the trust can satisfy any maintenance orders from the court. Example Homer and Marge separate and there is a court order that Homer pays Marge $20,000 per year. Homer and Marge have 3 children. If Homer pays Marge $20,000 p.a. he would need to earn about $40,000, pay half in tax to be left with $20k Instead Homer sets up a CMT with a settlor who begins the trust with $10. Homer then gifts $300,000 cash he has to the trust. This is invested and $20,000 earned per year. This is distributed to the children who pay no tax on it. You might think Homer is giving away $300k, but he is basically saving $20k per year for as long as the children are under 18. After the children all become 18 the trust can still be kept going, or it can be wound up with the kids getting $100k each. They might then give this back to their father, (or they may blow it).