Moving into a Retirement Village When You Have a Family Trust
More people are entering retirement villages with family trusts still holding their home or other assets. For some, the trust was set up years ago for creditor protection, relationship property reasons, or future Residential Care Subsidy planning. For others, it has simply existed quietly in the background without a recent review. The moment you move into a village – especially when you’re about to sign an Occupation Right Agreement (ORA) – is one of the most important times to take a fresh look at how your trust is working.
Not all villages treat trusts the same. Some allow the trust itself to purchase the ORA. Others require the resident to sign in their personal name, even when the trust owns the home that is being sold to fund the move. These are not just administrative differences. They affect where your sale proceeds are paid, how trustees are involved, what happens on termination of the ORA, and how you may be assessed for a Residential Care Subsidy later on. While most people discover this reasonably early on, they often overlook the importance of reviewing the Trust to see if it is still fit for purpose and to take the opportunity to deal with it while making the move into a retirement village lifestyle.
Many trusts also haven’t been reviewed for years. It’s common to find gifting not fully completed, trustees who have moved away or passed on, no recent minutes, outdated clauses, or assets that were intended to be in the trust but aren’t. None of these issues disappear simply because someone is moving into a retirement village. In fact, the sale of the family home usually brings everything to the surface because the money needs to go somewhere – and the right place depends on whether the trust is still serving the purpose it was set up for.
The ORA transaction creates an opportunity to take stock of the situation. Once you enter village life, your financial world generally becomes simpler. The large home is gone, expenses become simplified, and long-term planning comes into sharper focus, which makes this an ideal moment to reassess whether the trust should continue, whether trustees need updating, whether the trust’s purposes still make sense, and how the trust should interact with the ORA. These decisions also feed into Residential Care Subsidy planning and into making sure your Will and EPAs still reflect your circumstances.
By the time people reach this stage, they are usually weighing two decisions at once: whether the village is the right fit, and what to do with the old family trust. Those questions aren’t separate. The trust affects how the ORA is handled, and the ORA can bring into question whether the trust remains useful. A short review can often tidy up years of loose ends and give clarity about whether the trust should stay in place or be wound up.
If your trust hasn’t been reviewed in the last five years, the ORA process is the right moment to give it attention. Life changes, and trust documents rarely keep up on their own. A review now can confirm whether the trust still protects you, whether it still works for Residential Care Subsidy planning, whether it needs updating, or whether it is creating unnecessary complexity at a stage of life where simplicity matters.
Moving into a retirement village is a major transition. Taking the time to check that your trust is still fit for purpose can make the shift easier, smoother, and better aligned with your long-term plans. If you’re preparing to enter a village or are part way through the ORA process and unsure how the trust fits into everything, I can help you work through options before anything is signed.