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To Trust Or Not To Trust:

A practical guide to family trusts

What is a family trust? Is it for us?

Trusts are a popular way for New Zealanders to protect their assets. There may be a number of reasons why you are considering setting up a trust or have been advised to do so. A trust can offer a number of benefits and these are explained in this booklet. Before you make any decisions about this, however, it’s important that you understand what a trust is and how it works.

This booklet sets out some of the important features of a trust and what is required in order for your trust to work as intended. If the legal obligations are not met or you have retained too much control, your trust may not be legally effective or you may be treated as still an owner so that there is no benefit to you.

Contents of Guide:

Establishing a Family Trust
  • What is a family trust? Is it for us?

  • The benefits of a trust 6 Important things to think about

  • Doing it right is important

  • Mistakes are not always fata

Protection Given by a Family Trust
  • Business owners

  • Trading and development trusts

  • Trading in land and property development

  • Relationship property claims

  • Children with special needs

  • Education trusts

  • Claims against estates

  • Minimising tax liability

  • A trust or a company?

  • State assistance and benefits

  • Capital gains or succession tax

  • Maximum duration of trusts

  • Confidentiality

  • Charitable purposes

  • Dealing with changes in the law

Transferring Assets
  • The transferring of assets

  • Rest home subsidies

  • Gifting programme

  • Claims of a spouse or partner

  • Protection against creditors

  • Claims against estates

  • Timing is everything

Decisions to be Made
  • The trust deed

  • Name of the trust

  • Trustees

  • Independent trustee

  • Appointer

  • Protector

  • Advisory trustee

  • Beneficiaries

  • One or more trusts?

  • How much control is too much?

Completing your Estate Plan
  • Your Will

  • Letter of Wishes

  • Enduring Powers of Attorney

  • Other documents

Family Trust Administration
  • A trustee’s duties

  • Prudent investment

  • Trustee decision-making

  • Trustee liability

  • Tax

  • Accessing trust income

  • Accessing trust capital

  • Using a house owned by your family trust

  • Trusts carrying on business and investing

  • Relationship property issues

  • Life of the trust

What will a Family Trust Cost?
  • Establishing a family trust

  • Annual costs

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