A Family Trust is the foundation of almost every asset protection and succession planning structure. It will be used as a base document to protect your family’s lifestyle and retirement assets and to allow for any changes that may occur in your life.
The Family Trust is generally used by a couple either married or in a de facto that has combined assets of equal values and generally do not have children from any other relationship. Family Trusts will generally hold a Family Home, Investments a holiday home etc.
FOR ASSET PROTECTION
If you own assets and perceive that these could be put at risk or could have some potential for loss, then a Family Trust is for you.
A Family Trust will allow you to remove these assets from your ownership but still retain enjoyment and benefit from them. Trustees will hold these assets in a Family Trust on behalf of the family group.
The rationale for establishing a Family Trust includes ensuring your assets will be handed on to your family.
FOR PROTECTION FROM CREDITORS
However, assets protected and ring fenced in a Family Trust will, in most cases, not be available to business creditors. Without such protection your hard-earned assets can be subjected to claims from creditors and if successful, you may well lose them
FOR RETIREMENT PLANNING ADVANTAGES
A Family Trust can protect them so they are available when needed for retirement. Use of a Family Trust may also maximise tax advantages thus making the retirement dream that much more achievable.
Modern Trusts will allow control and access by retirees to income and capital if needed from their Family Trust, often with advantageous income splitting benefits.
FOR PROTECTION OF ASSETS FOR FUTURE GENERATIONS
For many families, their wealth has been passed from Family Trust to Family Trust, thus preserving it and ensuring the protection of Trusts is working for them over the decades. An inheritance should only be received by a Trust created specifically for the individual child who was to inherit the funds in the first place.