Children's trusts (also called Minor's trusts) are designed to manage and protect assets for a child until they reach a specified age.
Any child under the age of 18 is considered to be a minor in South Australia.
There are a number of ways a trust can be created for a minor:
- the child inherits assets from an estate and the Will specifies the inheritance is to be held in trust until they reach a particular age
- funds have been set aside by a family member for the benefit of the minor (eg as an education fund)
- funds have been awarded through a court to a minor as compensation for the death of a relative
- superannuation benefits have been paid to a minor from the entitlements of a family member who has died
- an insurance company or the court award money to a minor as compensation for an injury.
A minor's trust allows for a trustee to hold assets in trust for a specified time period. This could include when a child:
- reaches a particular age
- passes a particular milestone
- successfully completes an event (eg completing tertiary education).
In the majority of cases, the trust ends when the minor reaches a specified age - this is usually 18, 21 or 25 years of age.
When appointed as trustee for a minor's trust, the Public Trustee is obligated to adhere to conditions of the instrument creating the trust.
In most cases this allows for trust expenditure:
- at the trustee's discretion
- for a specific purpose (such as medical or education expenses).
In some cases, a trust instrument does not allow any expenditure and is designed to simply hold and protect funds until the child reaches adulthood or a specific event or milestone.