Family Trusts

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• Introduction to family trusts
• Why place your assets in trust?
• Costs and concepts of family trusts

Costs and concepts of family trusts

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:

• You no longer own the assets; they are owned by the trust. You may be one of the trustees, but your obligations are now to beneficiaries of the trust. While it is highly likely that you'll be one of them, you won't be the only one.
• There is regular homework that may need to be completed. Perhaps annual reviews need to be held, resolutions documented, or financial accounts prepared.
• There is a level of protocol that needs to be followed. A common approach is for a couple to have a third trustee. This trustee needs to be involved in all the decisions of the trust.
  

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.

Property solicitors conveyIT offer some legal guidance around family trusts. The property lawyers go further with advice around the paperwork required for a trust.