All Needs Protective Trusts
Wills & Estate Planning
Planning your estate is about more than just distributing assets—it’s about ensuring the long-term security and wellbeing of your loved ones. If you have a family member who may struggle to manage an inheritance due to age, disability, or other vulnerabilities, an all needs protective trust can provide a structured way to protect their financial future.
At Burgess Thomson, we specialise in protective trusts, helping clients establish legally sound and effective estate planning solutions that safeguard vulnerable beneficiaries. Our experienced team can guide you through the process, ensuring your estate is managed in a way that aligns with your wishes and protects your loved ones.
What is an All Needs Protective Trust?
An all needs protective trust is a legal structure designed to protect a beneficiary who may not be able to manage a lump sum inheritance effectively. Rather than receiving their share of the estate outright, the assets are held in trust and managed by a trustee who ensures funds are used appropriately for the beneficiary’s care and wellbeing.
This type of trust is often used for beneficiaries who:
- Have a physical or intellectual disability.
- Are of advanced age and require ongoing financial management.
- Are minors who are not yet able to handle financial responsibility.
- Struggle with addiction or financial instability.
By placing the inheritance in a protective trust, you can prevent financial mismanagement, safeguard assets, and ensure that funds are used for essential needs such as medical care, education, housing, and daily expenses.
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How an All Needs Protective Trust Works
When setting up an all needs protective trust, you will appoint a trustee—someone you trust to act in the beneficiary’s best interests. The trustee will have the legal authority to manage the trust assets, ensuring they are used for the beneficiary’s benefit as outlined in your Will.
The key features of a protective trust include:
- Controlled Access to Funds: The beneficiary does not receive a lump sum inheritance but instead has funds allocated for approved expenses such as medical costs, education, and living expenses.
- Protection from Financial Misuse: If a beneficiary struggles with managing money, a trust prevents wasteful spending and ensures long-term financial security.
- Legal Safeguards: A trustee is legally bound to act in the beneficiary’s best interests, ensuring the inheritance is used responsibly.
- Clear Distribution Plan: You can specify how funds should be used and who will inherit the remaining assets when the primary beneficiary passes away.
- Tax and Centrelink Benefits: Depending on the structure, a protective trust may help maintain eligibility for government benefits such as Centrelink disability pensions.
Who Should Consider an All Needs Protective Trust?
If you are concerned that a family member may be unable to responsibly manage an inheritance, a protective trust may be the right solution. This structure is particularly beneficial if your beneficiary:
- Has a permanent or temporary disability that affects financial decision-making.
- Is a child or minor who cannot yet manage assets independently.
- Is elderly and at risk of financial exploitation.
- Suffers from mental illness, addiction, or financial instability, which could put their inheritance at risk.
- Needs long-term care, medical support, or assisted living arrangements.
An all needs protective trust gives you peace of mind, knowing that your estate will be managed responsibly and that your loved one will have financial security without unnecessary risks.
How Burgess Thomson Can Help
Setting up a protective trust requires careful planning and expert legal guidance to ensure that it aligns with your estate planning goals. At Burgess Thomson, we:
- Assess your needs: We discuss your family situation to determine if a protective trust is the right solution for you.
- Draft a legally sound trust: We prepare a legally binding all needs protective trust tailored to your specific requirements.
- Guide you on trustee selection: Choosing the right trustee is critical. We help you understand the responsibilities and recommend options, including professional trustee services if needed.
- Ensure compliance with legal requirements: We structure the trust to meet NSW estate planning laws while maximising asset protection and tax benefits.
Estate planning is a deeply personal process, and our team provides compassionate, expert advice to ensure your wishes are carried out effectively.
Why Choose Burgess Thomson?
Burgess Thomson is a trusted name in estate planning, with decades of experience in protective trusts and Wills and estates law. Our clients choose us because we provide:
- Specialist Expertise: We focus on estate planning, ensuring your assets are protected and managed wisely.
- Tailored Solutions: Every family’s situation is unique, and we create trusts that align with your specific needs and goals.
- Compassionate Support: We understand that planning for vulnerable loved ones requires sensitivity and care.
- Clear Legal Guidance: We break down complex legal terms into practical advice, so you understand every step of the process.
FAQ's
How can a trust protect against third-party claims?
Estate assets which are held in trust can be protected from third-party’s claims against the individual beneficiary. This is because the assets are held by the trustee for and on behalf of the beneficiary rather than the assets being held by the individual beneficiary themselves. This means the trust money of the beneficiary is protected from predatory behavior of another person, or creditors collecting claims. This is important when a beneficiary may be particularly vulnerable.
How do these trusts benefit children?
An All Needs Protective Trust is particularly beneficial for children because it enables the assets to be managed by the family for the benefit of that beneficiary. This may be useful when parents pass away and leave their estate to their children. Grandparents may be able to use these trusts to bequest payment of boarding school and tuition fees for their grandchildren. This is a more tax effective method of providing for the grandchildren’s education.
