I am an adjunct Professor, holding seven university degrees including a doctorate in Estate & Succession Planning. Since 1988, I have specialised, as a lawyer in Estate Planning, Superannuation and taxation.
I am pleased to offer a certificate of accreditation from Legal Consolidated. This is on completion of the online training Course.
The Training Course covers how to protect vulnerable children in Wills such as:
The training course empowers you to build Wills on our law firm’s website, for your clients. You provide the financial planning and accounting advice and charge your clients for that advice. You can be confident and secure in the knowledge that we, and we alone, are providing the legal advice.
When you build your Wills on our website you are asked for the general Age of Majority. You may have selected 18, 21, 25 or some other age.
For this question, you may wish to set a different Age of Majority for just one particular Residuary Beneficiary.
This question allows you to set up a unique Age of Majority just for this Residuary Beneficiary.
If the Residuary Beneficiaries’ challenges are permanent or life-long then consider increasing the Age of Majority to 99 years of age.
Alternatively, if the child’s challenges may be temporary then consider increasing the Age of Majority for this person by a few extra years.
As you see fit, you can increase the Age of Majority for that particular child to a higher age.
Example: you may wish to increase the Age of Majority, just for one particular child to, say, 35 years of age. That means that the Backup Executors (which may include the child, as well) drip feed that child, or their carer or institution, the money the child needs. However, once that child reaches 35 years of age then that child takes the money and does with it as that child wishes.
Is the money protected for that particular child while it is in trust?
The inheritance for that child is protected in a Maintenance Trust. (This is just one of the many trusts that are in your Wills.) The inheritance for the child can only be used for that child. So while the child can’t get their hands on all the money (well, not until 35 years age) the money can only be used for that child’s benefit.
The Backup Executors must act in the child’s best interest at all times. This is an obligation under trust law. It is strictly enforced by the Australian Courts.
The Residuary Beneficiary may be mentally disabled or an alcoholic so you may wish to increase the Age of Majority to 99 years of age. In that instance, type in ’99’.
The Backup Executors drip feed this Residuary Beneficiary (or their carers) money that they need throughout their life. The challenged child may also be one of the Backup Executors – they all have to act together.
What if there is a medical cure or the Residuary Beneficiary recovers? Then the Backup Executors, when acting unanimously, may wish to get some or all of the capital to the Residuary Beneficiary at that time.
Otherwise, for the child’s life, the money is looked after for them by the Backup Executors.
The Backup Executors must always act in the Beneficiaries best interest. The Courts strictly enforce that requirement.
The child had been an alcoholic for most of his life – even before he had turned 18 years of age. His parents decided to increase the Age of Majority for the alcoholic child to 99 years of age.
His parents died.
His brother and sister, as the Backup Executors, looked after the money for the alcoholic child. Our law firm had put in a Maintenance Trust in the Will. We put a Maintenance Trust in all our Wills, in case they are ever needed.
Over the years a miracle occurred. The child stopped drinking he got married and had children. He completing his engineering course at University. Eventually, his brother and sister released his inheritance to him.
I continue to act for the family. Twelve years have passed and I am happy to report he has grown to be a well-respected member of the community. His parents would have been proud.
A Maintenance Trust is just a tool to hold and use the inheritance. This is for the benefit of the particular Backup Beneficiary. The Beneficiary does not own the assets directly. The Maintenance Trust allows your Backup Executors (as trustees) to look after the Maintenance Trust. The Backup Executors must always use the inheritance in the best interest of the Beneficiary.
The Maintenance Trust provides an alternative to leaving property outright to your challenged child. This is because they may have little capacity to manage and protect their inheritance themselves.
In all our Wills we put in Maintenance Trusts – just in case they are ever needed. Like many of the trusts, we put in your Will, the Maintenance Trust is dormant until needed.
The Maintenance Trust under your Will allows the assets to be used for the benefit of the challenged person. The challenged child won’t have to administer their own affairs or have unknown third party do so. It reduces the risk of them being left isolated, with nothing.
Without a Maintenance Trust in place, the challenged child may end up with an inheritance they don’t understand. In any event, in Australia, the law prohibits the direct transfer of property where there is no capacity to manage it. In these circumstances, the challenged person has a government official appointed under the Guardianship Act. This is costly and difficult. It allows the government to take control of your child and their inheritance. Instead, the Maintenance Trust puts that power back to your Backup Executors. The Backup Executors are usually your other children and family members.
The Backup Executors, under the power of the Maintenance Trust, can put some of the inheritance into a Special Disability Trust, after you die.
Each individual circumstance varies depending on the level of disability and the child’s particular needs and capacities. Your child needs to be properly cared for. You need to ensure their general health and wellbeing. Without a crystal ball, this is impossible. Therefore, the Maintenance Trust has flexibility. The Backup Executors have the power to protect the challenged child for:
Social support and interaction
Hobbies and interest support
As a father who has lost a child, I know that this is a very emotional and difficult discussion for you. I have been practising as a lawyer in tax and Estate Planning since the 1980s. I or any of our lawyers are very willing to speak with you on this. So please don’t hesitate to telephone to talk about what is the best decision for your vulnerable child. We can help you answer the online questions.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
Australia wide law firm
Telephone: 1800 141 612
Email: [email protected]