Why Retired Clients Still Need Trust Protection
It’s common to think that once you’ve left business life behind, you don’t need a Trust anymore. After all, many people set up their Trust originally to protect against business creditors.
But retirement brings different risks—and your Trust is still one of the strongest ways to guard against them.
1. Future Partners
If you own your home personally and enter a new relationship, it can quickly become **relationship property**. Recent court decisions have confirmed that a relationship with a new partner can start even before living together. It's very scary.
If your home is owned by a Trust, it’s protected. Without a Trust, you could lose half of it.
2. Accidents Overseas
ACC covers accidents in New Zealand, but not overseas. If you injure someone in a car accident while travelling, you may face:
- Substantial damages
- Legal costs
- Personal liability if your insurance doesn’t cover everything
A Trust shields assets from being exposed in such claims.
3. Protecting Children’s Inheritances
Without a Trust, your will requires assets to be paid directly to beneficiaries, regardless of circumstances. That means inheritances can be lost if a child is:
- Bankrupt
- Divorcing
- In residential care
Trustees of a Trust have flexibility: they can hold back distributions until it’s safe, or transfer assets directly to a child’s own Trust—keeping them secure.
Real-Life Stories
**✅ Success – Tom**
Tom, widowed at 72, kept his Trust. Years later, when he met a new partner, his home stayed protected in the Trust, avoiding a 50/50 relationship property split.
**⚠️ Failure – Elizabeth**
Elizabeth wound up her Trust in retirement. After a car accident in Australia, her insurance fell short, and creditors came after her personally owned home.
The Insurance Analogy
Think of a Trust like insurance: you hope never to need it, but if the worst happens, you’ll be glad it’s there.
The Bottom Line
Retirement doesn’t remove risk. It simply changes the type of risks you face. A well-run Trust continues to protect you—and your family—for decades to come.
📖 **Next step:** Contact us to book a **Trust Check** at our offices or via Zoom with Kirsty Hourigan +64 9 4155704. We’ll show you how to keep your Trust simple, compliant, and still working hard for your protection.
Disclaimer: This blog is general information only, not legal advice. The decision to wind up a trust has serious implications, including potential loss of asset protection and tax consequences. Please seek professional advice for your situation before taking any action.
