Protective Trust

Protective trusts are often established to ‘protect’ the capital and income of a person with a disability. For example, if a person is severely injured in a car crash and ends up mentally incapable of administering their affairs a protective trust may be established to protect any monetary damages awarded to that person.

The money/property is held on trust and can only be spent for the benefit (e.g. medical, rehabilitation, education etc.) of the injured person. As the money/property are held on trust they are ‘protected’ from creditors etc. of the beneficiary.

Protective trusts are also used by parents wishing to give money or property to a child but are concerned by a possible claim by the child’s spouse or de facto partner should the relationship come to an end. Whether such trust work for these purposes is questionable.

If you would like more information on trust structures and want to learn more about the most appropriate type of trust or trusts for your situation, please click here to submit an online enquiry form or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.