Trusts

A trust is a legal arrangement established by the settlor who usually sells or gifts assets to be held 'on trust' by specified persons (the trustees) for the benefit of specified persons (the beneficiaries). Any assets gifted or sold to the trust are legally owned by the trust.

Trusts can be established for a variety of reasons. A common reason is to preserve assets for future generations. Reasons for the trust establishment and conditions around distributions will generally be provided for in the trust deed.

Family trusts: established to keep asset ownership in the family and support family members in need.

Testamentary trusts: trusts established by provision in a will when a person passes away.

Mirror trusts: trusts, generally established by couples, where each partner is the settlor/trustee of the trust that the other partner is a beneficiary of.

Institutional constructive trusts: when a property transaction denies one party their property entitlement it might be considered their interest is being held 'on trust'.

For more information see:

• Key words within trusts

A trust can have an impact on Residential Care Subsidy because clients need to use the resources available to them before seeking financial assistance. We might expect a trust to provide resources to the client to help pay for their care.

When the client is a beneficiary of a trust, they will generally be expected to request support from it.

If a specific act of deprivation has been identified the trust can be looked to as a source of other resources available to help meet the cost of care. This is an essential consideration before deciding if discretion should be used to count deprived assets or income back into the financial means assessment.

There is an assumption that resources are available from a family trust unless there is evidence to the contrary. If the client is a beneficiary of a trust, their partner (if any) is a beneficiary of a trust or they have received regular support from a trust they will generally be expected to request support.