Protective Trust – this type of trust normally consists of two stages. Stage 1: A trust with a fixed income distribution to the principal beneficiary, until a 'termination event' occurs. The termination event can, for example, be the bankruptcy or death of the principal beneficiary. Stage 2: on the 'termination event, the fixed income distribution ends and the trustee instead holds the income to distribute, at its discretion, among a range of potential beneficiaries (normally the principal beneficiary (if living) and members of their family (if they have passed away).
Perpetuity Trust – this form of trust can, in Australia, only be established under South Australian law. While most western jurisdictions require trusts to end within a certain time period (normally a maximum of 80 years), South Australia has effectively abolished this rule and therefore trusts can potentially last indefinitely (i.e. in perpetuity).
Asset Protection Trust – this form of trust is normally established by an individual who is particularly concerned about potential asset protection risks, either from business, personal spousal relationships or family members. Often, the person gifts assets to the relevant trust which does not include the person as a potential beneficiary. The relevant person will also not have any control over the trust via roles such as trusteeship, principal or appointor.
Trust Partnership – primarily due to the flexibility created by the structure and the tax planning benefits, often a number of trusts will form a partnership to conduct business or investment activities. Invariably, while these trusts may individually be largely standard discretionary trusts, they will also often have an identical trustee and other specific control mechanisms.
Offshore Trust – While most western jurisdictions offer some form of trust, specific steps often need to be taken to establish any form of offshore trust and the exact way in which a trust operates will often be regulated by specific provisions in the relevant jurisdiction.
Each of the above trusts is explored in View’s book – 40 Forms of Trusts – Workbook.
** For the trainspotters, ‘Stairway to Heaven’ is a song by legendary band Led Zeppelin from their self titled album number IV in 1971. One of the greatest cover versions of the song, led by Ann and Nancy Wilson from Heart can be seen here (spoiler alert – Robert Plant begins crying at 4.32, as a choir and orchestra are revealed from behind drummer Jason Bonham, son of original Led Zeppelin drummer John).