Family Trusts?
#1
Family Trusts?
As far as asset protection goes the Kiwi's seem to be big fans of family trusts. Had a meeting this week with a solicitor and he is quoting $3,000 to set ours up and put our house in it and tie in wills. Anyone else done a trust and mind sharing their thoughts on it and what it cost them please?
I think we will go ahead as it ties in with our setting up our new company nicely - but if anyone has any experience or pointers to consider would be grateful.
Many thanks.
Loolah
I think we will go ahead as it ties in with our setting up our new company nicely - but if anyone has any experience or pointers to consider would be grateful.
Many thanks.
Loolah
#2
Re: Family Trusts?
Is the benefit to reduce taxation? Thought there was no inheritance tax here upon death.
My only other thoughts from a position of ignorance, are if one of your offspring went totally wild such that you would want to 'exclude them from your will', would you still be able to? Also think about implications if you were to divorce, who would control the family pot? Upon death of one of you, how quickly would stuff pass to kids?
My only other thoughts from a position of ignorance, are if one of your offspring went totally wild such that you would want to 'exclude them from your will', would you still be able to? Also think about implications if you were to divorce, who would control the family pot? Upon death of one of you, how quickly would stuff pass to kids?
#3
Re: Family Trusts?
As far as asset protection goes the Kiwi's seem to be big fans of family trusts. Had a meeting this week with a solicitor and he is quoting $3,000 to set ours up and put our house in it and tie in wills. Anyone else done a trust and mind sharing their thoughts on it and what it cost them please?
I think we will go ahead as it ties in with our setting up our new company nicely - but if anyone has any experience or pointers to consider would be grateful.
Many thanks.
Loolah
I think we will go ahead as it ties in with our setting up our new company nicely - but if anyone has any experience or pointers to consider would be grateful.
Many thanks.
Loolah
They are a good idea but get heaps of advice and from different sources.
Very god if you are going into business and you want that form of protection. But useless if you sign stuff as a personal guarantor - same applies to a limited company, which might be a better bet.
Depends on what you want to protect really.
Get good advice
Best of luck with the business
#4
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Joined: Apr 2008
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Re: Family Trusts?
Our first Trust was a cheapie - and ended up being a complete waste of time and had to be dissolved. We set up a well crafted Family Trust 3 years ago - with a very reputable firm of lawyers who specialise in Trusts. Cost us close to $ 3000.00 , but is working very well. You will need to update your wills when you set up a Trust . See if they will throw that in as a freebie. Just saw that you wrote he will cover wills etc. Sounds like a good deal. Just ensure that the Firm specialise in Trusts as it can be costly to correct mistakes.
Last edited by Hokey-pokey; Apr 8th 2009 at 9:32 pm. Reason: re read original post !
#5
Re: Family Trusts?
Our first Trust was a cheapie - and ended up being a complete waste of time and had to be dissolved. We set up a well crafted Family Trust 3 years ago - with a very reputable firm of lawyers who specialise in Trusts. Cost us close to $ 3000.00 , but is working very well. You will need to update your wills when you set up a Trust . See if they will throw that in as a freebie. Just saw that you wrote he will cover wills etc. Sounds like a good deal. Just ensure that the Firm specialise in Trusts as it can be costly to correct mistakes.
Haven't had any problems with ours., but what sort of problem's could arise?
I'd also give the same advice, by the way, about accountants. Our first one, large firm offices throughout central north island, heaps of paper on the wall, blah, blah, - man they messed up big time. Only now has that mess been sorted out and at great expense.
I don't know how - but if you can get it checked out before signing on any dotted
#6
Re: Family Trusts?
Yes it is a firm that specialises in trusts and as we are setting up a Limited Company and an LAQC too it can all be done together and tied in together with the accountants input.
It's not for any tax benefits it is for asset protection in the event of anything going wrong with either company really - it's an extension of "limited liability." The trust will own the house and the trust gifts back $27,000 pa to each of us. Plus we need wills doing anyway.
My understanding is you can cross beneficiaries off and add them after it has been set up. There is only going to be OH and me as Trustees and then the lawyer as the "Protector."
With regards to a divorce my understanding is if we can't agree on selling the property and splitting the proceeds then we stay put - gosh that'd be fun ...
It's not for any tax benefits it is for asset protection in the event of anything going wrong with either company really - it's an extension of "limited liability." The trust will own the house and the trust gifts back $27,000 pa to each of us. Plus we need wills doing anyway.
My understanding is you can cross beneficiaries off and add them after it has been set up. There is only going to be OH and me as Trustees and then the lawyer as the "Protector."
With regards to a divorce my understanding is if we can't agree on selling the property and splitting the proceeds then we stay put - gosh that'd be fun ...
#7
Re: Family Trusts?
I was thinking of faxing or emailing it to my family's solicitor in the UK - my understanding is the only real difference is that here in NZ you only need yourself and partner as Trustees, not a third party - that third party is a "Protector" not a trustee and can't force a deciding vote between the two of you, but looks after the best interests of the beneficiaries.
#8
Re: Family Trusts?
Yes it is a firm that specialises in trusts and as we are setting up a Limited Company and an LAQC too it can all be done together and tied in together with the accountants input.
It's not for any tax benefits it is for asset protection in the event of anything going wrong with either company really - it's an extension of "limited liability." The trust will own the house and the trust gifts back $27,000 pa to each of us. Plus we need wills doing anyway.
My understanding is you can cross beneficiaries off and add them after it has been set up. There is only going to be OH and me as Trustees and then the lawyer as the "Protector."
With regards to a divorce my understanding is if we can't agree on selling the property and splitting the proceeds then we stay put - gosh that'd be fun ...
It's not for any tax benefits it is for asset protection in the event of anything going wrong with either company really - it's an extension of "limited liability." The trust will own the house and the trust gifts back $27,000 pa to each of us. Plus we need wills doing anyway.
My understanding is you can cross beneficiaries off and add them after it has been set up. There is only going to be OH and me as Trustees and then the lawyer as the "Protector."
With regards to a divorce my understanding is if we can't agree on selling the property and splitting the proceeds then we stay put - gosh that'd be fun ...
#9
Re: Family Trusts?
Another thing which made family trust's popular, and particularly putting property in a family trust, is asset testing particularly in regards to retirement and aged care along with 'futureproofing' any changes to any superannuation funds. If you don't own the asset (even though you may live in it) you won't have to sell it to get certain care or benefits.
A trust can have provisions in case of divorce or dissolution of the trust. Just make sure it is included.
A trust can have provisions in case of divorce or dissolution of the trust. Just make sure it is included.
#10
you dewty owld maan!
Joined: Oct 2005
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Re: Family Trusts?
Advice I've had from other business owners is to set the trust up sooner rather than later as it seems less like a place to squirrel away your assets from potential creditors and litigants if your business fails/gets sued.
Personally I have very little in the way of assets in NZ and I am more likely to get litigaed against here rather than fail as a business owing suppliers, sub-contractors, etc (as I don't have any!). Hence the trust is probably a year or so away - so there you go, LardyL ignoring advice as usual......
Personally I have very little in the way of assets in NZ and I am more likely to get litigaed against here rather than fail as a business owing suppliers, sub-contractors, etc (as I don't have any!). Hence the trust is probably a year or so away - so there you go, LardyL ignoring advice as usual......
#11
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Re: Family Trusts?
A Trust will also protect your hard earned family wealth from potential " gold diggers ".
For example, if your kids/ grandchildren shack up with someone and then split up after a couple of years , then that individual could potentially be entitled to 50 % of your childs inheritance. Likewise their inheritance may have to be split up between step children and divorced partners etc.- people you have no blood connections to.
Its all about protecting your assets for the benefit of your nearest and dearest.
For example, if your kids/ grandchildren shack up with someone and then split up after a couple of years , then that individual could potentially be entitled to 50 % of your childs inheritance. Likewise their inheritance may have to be split up between step children and divorced partners etc.- people you have no blood connections to.
Its all about protecting your assets for the benefit of your nearest and dearest.
#12
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: Family Trusts?
Fortunately my kids are very unlikely to be shacking up in the next decade, on the other hand I could be sued for tens of millions of dollars if some of my work fails to get the client what they want/need
#13
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Joined: Apr 2008
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Posts: 331
Re: Family Trusts?
Our kids better not be shacking up for a decade or two either! The thing is though you need to start drip feeding into a Trust , ? upto 50k a year like Am Loolah said. Think you can run into difficulties if you try to set one up in a hurry in order to protect vast sums/assets. Also a Trust needs to be seen as being active, not just as a hoarding post.
#14
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: Family Trusts?
Yeah at the moment I wish I had a spare $50k to do anything with, all tied up in UK and in the business 'fraid......but we can live in hope.
In spite of that life here is great, much better than the rat race in the UK where we were earning 3 or 4 times as much and had probably 20 times the disposable income.
Happy church mice better than miserable fat cats I'd say
In spite of that life here is great, much better than the rat race in the UK where we were earning 3 or 4 times as much and had probably 20 times the disposable income.
Happy church mice better than miserable fat cats I'd say
#15
By name and by nature
Joined: Mar 2005
Posts: 1,852
Re: Family Trusts?
I was thinking of faxing or emailing it to my family's solicitor in the UK - my understanding is the only real difference is that here in NZ you only need yourself and partner as Trustees, not a third party - that third party is a "Protector" not a trustee and can't force a deciding vote between the two of you, but looks after the best interests of the beneficiaries.