T h E B e n e f i t so f a f a m i ly t r u s t

1. Protect selected assets against claims and creditors – for example, to protect your

family home from the potential failure of a business venture.

2. Set aside money for special reasons, such as a child or grandchild’s education.

3. Ensure your children, not their partners, keep their inheritances.

4. Avoid unwanted claims on your estate when you die – such as from a former partner.

http://money.howstuffworks.com/personal-finance/financial-planning/10-reasons-to-start-a-trust.htm

http://www.howtolaw.co.nz/set-up-a-family-trust-xidp392293.html

https://www.sorted.org.nz/a-z-guides/family-trusts

S O U R C E S

G e t t i n g a d v i c eFamily trusts should typically

be formed by a lawyer or a

professional trustee company.

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w h o ’ s I n v o lv e d

The person or company

who creates the trust , e .g. YOU.

The people who manage the trust. If you are the settlor you

can also be a trustee. It ’s also a good idea to appoint an

independent trustee l ike a lawyer or accountant.

The people who benefit

from the trust , for example

members of your family .

A S e t t l o r T r u s t e e s B e n e f i c i a r i e s

i t ’ s m e Lov e y o u r l awy e r ! let ’ s leave i t to the boys !

1. You will need to decide what assets should be put into the trust.

2. Ownership of these assets will then be transferred to the trust.

3. The trust then owes a debt back to you, the settlor. This debt can then be

‘forgiven’ through a process called gifting.

4. A legal document called a ‘trust deed’ will formally set up the trust.

5. It will appoint the trustees, list the beneficiaries, and state various rules

for the administration and management of the trust.

6. The trust deed needs to be very carefully written, preferably by a lawyer.

W h a t ’ s I n v o lv e d

O n c e y o u p u t y o u r a s s e t s i n to a t r u s t , y o u n o l o n g e r p e r s o n a l ly o w n o r

c o n t r o l t h e m . I n s t e a d , o w n e r s h i p p a s s e s to t h e a p p o i n t e d t r u s t e e s w h o

m u s t a c t u n d e r t h e t e r m s o f t h e t r u s t d e e d i n t h e b e s t i n t e r e s t s o f

t h e b e n e f i c i a r i e s .

C o s t s o f t r u s t sFamily trusts can be complex and time consuming to administer.

It costs money to set them up and there are generally ongoing legal

and accounting fees.

R i s k s o f t r u s t sIf a trust is not set up or managed well,

there can be considerable inconvenience and cost.

C o s t s a n d r i s k s