Pension-aged Beneficiary of TT

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

 

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.

 

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