Why Set Up A Trust
A trust can be used to protect the ownership of your assets. You transfer the legal ownership of the assets to the trust while continuing to use and enjoy them. For example, if the family home is in a trust, you no longer personally own the house - but you could still live in it if that's what the trust deed states. People usually set up a family trust to get some benefit from no longer personally owning an asset.
A family trust may be useful to:
- Financially distance you family and business to protect your assets against claims from business creditors.
- Ensure your children keep their inheritances rather than their partners or provide for future generations.
- Avoiding unwanted claims on your estate when you die – such as from a former partner.
- Defeating asset testing
Lawyers and Accountants
Family trusts can be complex and time consuming to administer. It is important they are set up correctly so that they serve their purpose and are not considered ‘Sham Trusts’. It also costs money to set them up and there are generally ongoing legal and accounting fees.
They should usually be formed by a lawyer or a professional trustee company. Get professional advice right from the start is very important to maintain the integrity of the trust.
