sec.182Meaning of protective trust

sec.182 Meaning of protective trust

For this division, a trust is a protective trust if, under the trust, income is, without prejudice to any prior interest— held on trust for the benefit of a person (the principal beneficiary )— for the period of the principal beneficiary’s life or a lesser period (in either case the trust period ); or until the trust (the primary trust ) sooner fails or determines because of an intervening event; and if the primary trust fails or determines during the trust period—held on trust for the remainder of the trust period to be applied, as the trustee considers appropriate, for the maintenance, education or advancement (including past maintenance or education) of 1 or more of the following persons— the principal beneficiary and the principal beneficiary’s spouse or issue; if the principal beneficiary has no spouse or issue—the principal beneficiary and the persons who would, if the principal beneficiary were dead, be entitled to the trust property or the income of the trust property. For this division, a trust is also a protective trust if it has a similar effect to a trust mentioned in subsection (1) . In this section— income includes an annuity and any other periodic payment of income. intervening event , in relation to a primary trust, means an event provided for under the trust instrument that, if it happens, results in— the principal beneficiary of the primary trust being deprived of the right to receive the income, or part of the income, of the trust; and the consequent failure or determination of the primary trust. (sec.182-ssec.1) For this division, a trust is a protective trust if, under the trust, income is, without prejudice to any prior interest— held on trust for the benefit of a person (the principal beneficiary )— for the period of the principal beneficiary’s life or a lesser period (in either case the trust period ); or until the trust (the primary trust ) sooner fails or determines because of an intervening event; and if the primary trust fails or determines during the trust period—held on trust for the remainder of the trust period to be applied, as the trustee considers appropriate, for the maintenance, education or advancement (including past maintenance or education) of 1 or more of the following persons— the principal beneficiary and the principal beneficiary’s spouse or issue; if the principal beneficiary has no spouse or issue—the principal beneficiary and the persons who would, if the principal beneficiary were dead, be entitled to the trust property or the income of the trust property. (sec.182-ssec.2) For this division, a trust is also a protective trust if it has a similar effect to a trust mentioned in subsection (1) . (sec.182-ssec.3) In this section— income includes an annuity and any other periodic payment of income. intervening event , in relation to a primary trust, means an event provided for under the trust instrument that, if it happens, results in— the principal beneficiary of the primary trust being deprived of the right to receive the income, or part of the income, of the trust; and the consequent failure or determination of the primary trust.