Our own Penny Jones talks about Trusts and why it’s important to have them.
Trusts and Asset Management
What does Trusts and Asset Management mean exactly? As the name suggests, a trust is a relationship “of trust”, created between “trustees” (usually, but not always individuals) who hold assets for the benefit of other persons (usually, but not always individuals) called “beneficiaries”. The trust is this relationship. Although there is no such entity as a trust, the relationship making up the trust is stringently enforced by the courts.
The person who originally creates the relationship of trust is the “settlor” who transfers or “settles” assets on behalf of the trustees who hold them in the interests of their beneficiaries. The “settlor” may have the power to appoint or remove trustees during their lifetime and that right may have to be dealt with in their will.
Not everyone needs a family trust but many people find trusts are either useful or necessary at some stage of their lives. A trust often involves the protection of assets a person has spent a lifetime acquiring. Our clients include both high-net-worth individuals, along with individuals whose main concern is the protection of their home and other personal property for their immediate family. They share the same objective of ensuring their wishes are followed, wealth is preserved, risks (and taxes) are minimised legally and loved ones protected.
Forming a family trust may help your family in various situations including a marriage or relationship breakdown, acting positively to provide protection from creditors, a part of legitimate tax planning, or to enable lifelong security for loved ones.
It is often wise to separate business activities (and risks) from the ownership of the family home and other personal assets. This can be achieved through a ‘trading trust’, a limited liability or a combination of these with other legal entities.
Trusts are useful in many situations. They can be set up to provide for virtually any situation. We can give effect to any legitimate arrangement that enables our clients to structure their affairs in the most convenient, suitable and effective way, in order to protect assets and minimise both personal and business risk.
Recently, the Law Commission has reviewed the law of trusts and made a number of recommendations for a new “trustees’ Act” If adopted, this legislation will make the rights and responsibilities of trustees and beneficiaries clearer.
Our trust expertise, gained over many years as a leading Auckland law firm, is supported by our experience in wills and estate administration, living wills and enduring powers of attorney and by our Family – Immigration and Disputes Resolution teams.
Our services include:
- Family trusts
- Advice to settlors, trustees and beneficiaries
- Independent trustee services
- Gifting and advice on asset protection in relation to creditors
- Advice on property relationships
- Estate and retirement planning
- Business and special purpose trusts
- Charitable trusts