The Benefits Of Setting Up A Trust For Someone
One of the most common reasons to set up a trust is to minimise tax. Other reasons will include protecting assets and ensuring your family legacy. A lot of wealth has been provided for people with the boom in real estate and the stock market which is why setting up a trust is seen as a good way of saving wealth. However, it is a complicated process so you will need to talk to an Auckland trust lawyer to make sure it is carried out correctly.
A trust fund is one of the best ways to preserve your family wealth. The trust will be managed by trustees who are responsible for ensuring that the income and assets in the trust are passed on to the beneficiaries. The beneficiaries could be the people who established the trust as well as people specified by the trustees.
While the trust will have a beneficiary, the money and other assets will be handled by a trustee that has experience in this. This is one of the reasons why accountants and lawyers are often chosen as trustees. The arrangement of a trust will also ensure that the beneficiary does not recklessly act with the assets in the trust.
Various Types Of Trust
There are various types of trusts that can be set up. They will all have their own benefits and drawbacks that you need to know about. An Auckland trust lawyer will be able to advise you on the most suitable type of trust to meet your intentions. There are some trusts that are beneficial when it comes to saving on estate taxes when a spouse passes away. A revocable trust can also help with the transferring of assets to beneficiaries without a probate process.
If you are setting up a trust for a child, it is important to set this in a manner that clearly states when and how the child will get the income from the trust revenue. There are some trusts that will provide money to the beneficiary in the form of an annuity. Other trusts will provide access to the full value of the trust when the child turns a set age which is commonly 21. It is important to note that there are no right or wrong choices as this will depend on how and when you want your child to get the money.
A trust can be used to protect assets from creditors. However, you will need to ensure that the trust has been set up correctly. The trust has to be set up in a way that does not unfairly deprive the creditors of their rightful payment.
If there are children from a spouse’s previous marriage, you can ensure that they are not beneficiaries of your estate through a trust. The trust can list your blood children as the beneficiaries and you can place your estate in the trust. This is known as a Family Trust.
Be Clear About The Objectives Of The Trust
It is important to note that a trust is different from other financial instruments. It can be difficult to get your money back after placing it in a trust. This is why you need to think about all of the pros and cons of creating a trust before choosing the one that you want. It is also important to note that you will no longer be the owner of the assets in the trust which means that you cannot sell them when you want to. To do this, you will need to have the agreement of the trustees.
The Benefits Of A Trust
There are a lot of benefits to setting up a trust. This will include reducing taxes such as estate tax which your estate may end up paying to the government. If you want to keep your assets away from the eyes of other people, a trust offers you a way of keeping your wealth hidden.
If you need advice on setting up a trust, consult an Auckland trust lawyer like McVeagh Fleming.