Family Trusts

I'm about to build a new home and being a bit long in the tooth and single was thinking of putting it in a family trust for my kids.

Any advice and pro's and con's would be appreciated.

We've investigated this and the one main piece of advice we've had from our accountant (of some repute, and wouldn't be getting any business from us to set up the trust), is keep away from Public Trust Office. That's what we've been told, Other's will disagree and have favourable opinions. Just what we've been advised.

On a more positive note, have a read of the NZ book "Family Trusts in New Zealand, Protect Your Family's Assets and Weather and Uncertain Future", by Johnathan Cron.

we have looked at it as well.. the fall down for me was the 'gifting' maximum.. wanting to get assets into a trust was going to take years..
definately a good accountant can advise

stephclark;356971 wrote: we have looked at it as well.. the fall down for me was the 'gifting' maximum.. wanting to get assets into a trust was going to take years..
definately a good accountant can advise

I seem to recall hearing something lately that this gifting business was being abolished, or significantly changed or something along those lines.

I believe that gift duty is about to be abolished Jan.

stephclark;356971 wrote: we have looked at it as well.. the fall down for me was the 'gifting' maximum.. wanting to get assets into a trust was going to take years..
definately a good accountant can advise

Stephclark, Just be aware that the gifting process is due to be abolished later this year - October I believe (here's hoping it does actually happen!), so will make things so, so, so much simpler and quicker!

Having just completed setting up a family trust (so far all has gone o.k and only have positive things to say about the process), the first thing I can recommend is getting a lawyer who you trust and feel comfortable with, and who has experience with setting trusts up. Ask around for a good one - I can recommend a good one here in Hamilton but that's a bit far away!

There are several different ways of setting up trusts and it all depends on what you intend the trust to do and how it is to operate. So your lawyer must understand trusts inside out and back to front, to get all the legalities right. The lawyer may also recommend you getting an accountant to consult with too if your trust is going to be an income-earning trust.

There are also specific ways of wording your will too, regarding your childrens access to the trust once you pass on, i.e. having them become Trustees of your trust once you die enables them to gain complete control of your estate within days of you dying, instead of perhaps having to wait months or years (yes, it can take this long to settle an estate!). Also if you leave only one child as a trustee, they have autonomous control and the other/s have no say whatsoever. All of this can be a positive or a negative, depending on your children and if you have stock involved.

If there is anything specific you want to know, PM me and I'll answer the best I can, according to what I have learnt along the way.

Oh yes, Keep away from Public Trust Office!!!

cool.. thanks greenfingers.. i have a brilliant accountant.. so will chat to him again later in the year

Public Trust Office does things their own way, and ignore what the beneficiaries want. One story from some friends, their father died suddenly, keeled over mid milking with a heart attack, some years after their mother, the Executor for the Will was the PTO.

The three kids, (2 daughters and the youngest a son) were respectively a sales manager, a chef and a sharemilker, Dad was running the farm quite capably himself with a couple of labourers, so didn't have the son on farm.

The will was a pretty simple one, "leave everything to my spouse, if predeceased by spouse, equally to my issue" type.

The three kids wanted to keep the farm in family hands and told the PTO not to sell the farm, the son would finish his sharemilking contract and take over the farm as a partnership with his sisters shares and as things settled, buy out his sisters shares of the farm. That way the family home would still be in family hands and the kids children could keep coming to grandpas farm on holidays as usual.

Public trust ignored all that, sold the farm and handed the three cash. So a farm which had been in the family 3 generations and could have gone 4 or 5, got sold because it was too much hassle for the PTO trustee to do anything more than hand things over to an estate agent and parcel out the resultant cash.

At least if you nominate someone trustworthy as a trustee and/or executor then they can be told to LISTEN to what the beneficiaries say, not just follow form 3A and Checklist 71D or whatever the standardised crap the PTO does.

Yep, keep away from PTO - I've only heard bad things about them.

I've recently been told that a trust can be set up so that you yourself are the trustee and a lawyer only comes into the equation if you pass on.

Some trust's can be not worth the paper they are written on, but a well worded one will provide financial security in whatever way it is intended. Be aware however that it is widely expected that laws and taxation on trusts are due for some major legislation changes in the near future so seek the services of a good solicitor before committing to a binding trust document.

We also have set up a family trust sad the last gifting for us is in October so will be finished anyway.
Ours is with pto as were my late father and mothers both seperated many years ago so that was two both were handled very well and quick when my mother died my sister and I became trustees so then it was us two and the trust so we had the votes same happened with our fathers also will with ours our childen will take our places it is written into the trust deads as said any help we can be get in touch. pm

Interesting in that when I was married (divorced now) our Accountant kept saying "set up a family Trust" Now given that my hubby and I owned our property 50/50 and I was not a Director or Shareholder in any of our Companies (deliberately) there was no way I would lose my home if it all went belly up (bearing in mind we worked in the USA from here as an example) as no one could force me to sell my share of the property - not my bills. Equally, when we seperated, I had full entitlement to a share of the Companies and benefited from that.

I don't get Trusts at all! You pay tax at a higher rate possibly than you would without a Trust and I have seen far too many women walk away from a marriage (not me but when traded in for a younger model) with nothing as everything is tied up in a TRUST. So why and what possible advantage would there be to setting up a trust if it is not to protect your assets i.e. from Business failure etc ?

I have just been through this with my Lawyer recently, suggesting that I need to set up a trust BEFORE I meet a new partner (as if!) as the Law will not recognise my property is mine if I get into a new relationship without a Trust. Say wot Lawyer? If that happened, what the hell happened to the pre nup /pre relationship agreement. I'm a strong woman and why the hell would you agree to living with someone without an agreement that clarifies - what I have going into this is for my children just as yours is also yours - so black and white agreement. You don't want to sign that then B###ar off!"

So why everyone - do you have trusts?

DiDi;357029 wrote: .......

So why everyone - do you have trusts?

In order to avoid death duties for your offspring, and to protect the family wealth being plundered by a gold-digging spouse of son or daughter in the case of a marriage 'failure' are two reasons. Every family has its own unique requirements and risks that a trust can be tailored to suit.