testamentary discretionary trust (NSW)

When making a will with a testamentary discretionary trust in NSW to benefit an adult kid who is single, is there a way to set this up so it will be safe from a future spouse or defacto trying to claim assets and/or income of the trust if the relationship goes pear shape?

 

Yes I can think of a few ways.

 

Interested to know more about this too!

 

Family law has 2 main issues to consider
a) an asset of a party to a marriage or relationship, and
b) a financial resource that can be drawn on

So you would have to word wills so that those 2 can be avoided or reduced.

 

Guessing you have it sorted now but several solicitors such as Cleary Hoare offer a "Bloodline Testamentary Trust" which covers what you require

 

These would limit the beneficiaries to the blood line descendants of a particular person, often the deceased. But that doesn't mean the trust or its income will be safe from spouses of the bloodline.

 

The family court may even consider the trust assets and merely allocate this to a specific party and reduce other asset entitlements in its place. Ideally you dont want the court to count the trust assets as marital property. Trust powers of appointment or control can play a factor where a trust that has external or independent control may not be as exposed. eg Dave's parents have a TT will that prescribes Dave is a successor appointor etc on their death. He is also the primary beneficiary. Sure his kids etc are also. Its hard for Dave to argue he has no control over trust assets and income. However if his Brother and Sister were co-trustees and he is a mere potential beneficiary it may be improved.

One of the greater weakness to bloodline trusts is the trustee itself and also the role of successor appointors. I like a version where the control of the trustee company is embedded into the constitution which governs arange of estate planning issues. This can make a general Disc Trust akin to a testamentary trust in some respects and it will bypass the deceased's will when correctly drafted and implemented. Addition of further assets of the deceased could arise on death.