|about us newsletter contact us site map search legal|
July 05 newsletter
Trusts have been around for a few years. Apparently, in medieval times, knights put their assets in the hands of a trusted old soul who would ensure that the knight's family was looked after should he come second in a sword fight on his latest tour of duty.
Today, family trusts are formed by people in far less dangerous occupations,
but the concept is the same. You (the settlor) give your assets (through
a process of gifting) to a trust. The assets are no longer owned by
you. Instead, they are now held in trust, by your trustees, for the
benefit of the beneficiaries of the trust.
Why would you place your assets in trust?
There are a number of very sound reasons.
Costs and Concepts
But there is a cost. Firstly, there is the cost of setting up the trust. Then there are on-going costs, such as managing the gifting process and completing annual accounts, if required.
What is less well understood is that trusts can be busted. You need to understand three important concepts:
Like all major financial decisions, family trusts should be considered, and not undertaken lightly. Please seek advice from your legal adviser as to whether a family trust may be appropriate for your circumstances.
A book we recommend to help in understanding this topic is Family
Trusts, A New Zealand Guide, by Martin Hawes.
Random page of the month
Consider these media sources for additional personal financial information.