Taking care of your personal estate and assets is one of the most important things you can do. We will work with you to create a sound, fully protected plan that leaves nothing to chance – both during your lifetime and after your death.
Are you thinking about setting up a family trust? Many people come to us because they are confused about whether they really need one. A trust can be an excellent way to protect your assets, however sometimes there is a better, easier and more affordable way to protect your assets. Your estate plan may be as simple as a well drafted will, or it may extend to trusts and relationship property agreements designed to protect your assets.
Alternatively, you may already have a family trust which would benefit from a bit of a tune up. Cases of mis-managed trusts are always making the news. We can help ensure yours is set up to work as intended.
We can also review your family trust and advice you on whether it is still needed and, if its purpose has ceased, we can assist you to simplify your affairs by winding up your family trust.
We also provide professional trustee services and ongoing trust administration. As families and circumstances change so does the need to regularly review and update the structures and documentation in place. We will assist you to fully and properly review your affairs to ensure the best possible outcome.
Come and talk to us about your wishes for your assets and we will work with you to structure a plan that achieves your goals.
FREQUENTLY ASKED QUESTIONS
What is a trust, and what does it mean when it is described as a discretionary trust?
A trust is not a separate legal entity or person, like a company or an individual. A trust is a fiduciary relationship in which the settlor(s) gives the trustee(s) the right to hold title to property or assets for the beneficiary(ries). A trust has a deed which sets out how the trustees are to operate and how trust assets are to be administered.
A discretionary trust is whereby the trustee(s) can exercise their discretion as to which beneficiaries receive a distribution/benefit from the trust and what those distributions/benefits are. Beneficiaries can receive distributions of income or capital from the trust. Most family trusts are discretionary trusts.
Do I need a family trust?
Forming a trust is a way of protecting assets and accumulating wealth for future generations. A trust is set up for many reasons, with the most common being:
- estate planning to provide for, and benefit, future generations;
- to manage the assets of a family member who is unable to manage their own financial affairs;
- protection against relationship property and third-party claims; and
- retirement planning.
Trusts need to be properly administered and must comply with legal requirements. We can advise you if setting up a trust may be the right option for you.
We no longer use our family trust; can we get rid of it?
Most trust deeds have a dissolution or winding up clause, which will specify whether the trust can be wound up early and in what circumstances. Reasons for winding up a family trust early include:
- the reason for setting up the trust in the first place no longer exists (e.g. the trust was established to fund the education of certain offspring, and they have now ended their education);
- the trust was set up for the benefit of parents and children, but the parents are now deceased - so the children might decide to wind up the trust and distribute the assets among themselves;
- the trust was set up by a couple, and that couple has decided to separate;
- the trustee(s) think there is no longer any benefit to having a family trust.
There can be crucial implications of winding up the trust which need to be considered before a decision is made to wind up a trust; for example, the distribution of the assets may impact your chances of qualifying for a residential care subsidy. We can explain and discuss these implications with you, and weigh up the pros and cons of winding up your family trust.
Why is it important that your family trust is administered?
Once a trust has been established, it must be administered properly. A family trust achieves its objectives by separating ownership of the family's assets from your personal assets. If the trust is not administered properly to recognise this separation, the trust could be challenged as a sham trust by a creditor, relationship partner, the IRD or Work and Income New Zealand. If such a challenge succeeds, the benefits available through the trust structure will be lost.
What is an independent trustee, and should our family trust have one?
While the law requires all trustees to act independently and impartially, the term ‘independent trustee’ is used to describe a trustee who is not a beneficiary of the trust and cannot benefit from the assets of the trust.
An independent trustee is highly recommended as they can play an important role in ensuring that all beneficiaries of the trust are treated impartially and fairly. This is particularly important in family situations where competing interests and family tensions can place trustees under strain.
An independent trustee should have professional expertise and skills that will assist the other trustees with decision making and administering the trust. While there will be fees associated with having a professional trustee, the right independent trustee can be seen as an ‘insurance policy’ against attacks against the trust by disgruntled family members or outside parties (such as creditors) and help with managing the trust assets and ensuring the trust is properly administered. We can help set up an independent trustee company for your trust.
Suzie clearly delivered to myself and others a focused and friendly approach to all the issues presented to her. We had some older family member matters to resolve; Wills, Trust issues, License to Occupy, etc.. Suzie provided exceptional service, concise and sound advice which we accepted and followed through in the execution of the required legal documents. Suzie is professional, focused and pragmatic in providing intelligent legal solutions and recommendations.
Our family has used Rosie for everything from wills and family trusts to house purchases and sales. I can absolutely recommend her, she is easy to deal with, communicates well, makes things simple and to top it off is a lovely person to work with.
“Rosie helped us with our wills and powers of attorney and she made it such an easy process for us. She gave us a lot of advice and explained different ways we could do it, all along with a friendly professionalism. I cannot recommend her enough and will definitely be using her services in the future.”