Trusts - Elizabeth and George

Elizabeth and George transferred most of their assets into a family trust some years ago. George was in the construction business and wanted to protect their personal money from business creditors. The couple was also concerned that a future government might re-introduce estate duties and retain the asset-testing regime for rest home subsidies.

When George died, Elizabeth thought that she would have full control over the trust and the assets it covered. She was surprised and upset when the family lawyer, who was also a trustee, told her this wasn't the case. He said that as trustees, they had to make decisions in the interests of all beneficiaries, including the couple's three adult children.

Fortunately, the children readily agreed to forego any interest in the trust and Elizabeth was able to gain full control. She now knows that she hadn't understood the full implications of setting up a trust, in particular that she was relinquishing full control of matrimonial assets. She felt lucky that the children had been so understanding.