What is a trust ?
A trust is a form of transport, much like a container truck. The driver and co-driver are the Trustees, who are charged with ensuring the safe transportation of the container contents, being the Trusts Assets, for the benefits of the recipient, being the Beneficiaries of the Trust.
Why should I use a trust?
It is all about asset protection now and in the future, preservation of assets for the next generation and a safeguard against Government means testing. At the outset, it should be borne in mind that the reasons for implementing a trust structure are extremely important. Your family circumstances clearly play a pivotal role in this regard.
Outlined below are a number of reasons why implementing a trust structure could possibly be of benefit to you and your family:
- Protection of core family assets for present and future generations (this has been the traditional use of family trusts and should be the prime consideration when any trust is established).
- Protection from business creditors (separation of core family assets such as the family home from business risks).
- Protection of particular beneficiaries (example, children with special needs, educational trusts).
- Protection from matrimonial property claims and de facto claims.
- Protection against possible income tax consequences and future taxes.
- Protection against the likely consequences of inflation.
- Incidental benefits in relation to means testing and rest home subsidies.
Could a trust benefit me and my family and when should I use a trust ?
As soon as you have any assets. Ask yourself, do I want to lose my assets to creditors or the Government? If the answer is “No” to those questions, then speak to a Trust specialist regarding a Trust. Trusts are an invaluable asset protection tool and mechanism for preserving one’s wealth.
For more information and advice about setting up a family trust, trusts and asset planning please contact our Trust specialists at Quay Law NZ for more more information.