North Shore Trust Lawyer – What Is A Family Trust And Do You Need One?

Posted by ju7dbvu6 on October 14th, 2018 — Posted in North Shore lawyers

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How a North Shore Trust Lawyer Can Help You

Firstly, let us start with a good understanding of what a Family Trust actually is so that we can move on to the second part of our question.  In short, a Family Trust is simply a trust that is set up to protect the assets of the family, both current and those members to come in the future.  Sound simple and fairly basic so far?  If it is this simple why does every family not have one? Here are some thoughts from a North Shore trust lawyer. It is not legal advice, and you should consult a lawyer for full details.

 

So let’s drill down a little to see why one would want to go to the time and expense of having a trust set up in the first place, and by seeing the major reasons for going down this road we should be able to see where it’s for us or not. Then look at a North Shore trust lawyer that you can talk to about taking this further.

 

Reasons why you may wish to set up a family trust.

 

1) Protecting assets from commercial claims

By transferring property of funds from our name into a family trust, these funds are then protected under law and cannot be touched.  While you will probably be responsible for the debt shortfall, such as the remaining mortgage on a property, while you still have to repay the debt, the property has now passed to the trust and cannot be taken back in lieu of repayment.

 

2) Protecting your assets against relationship property claims. 

In short, if you pass property or finances to a child in your will, once that child receives the inheritance, the spouse can claim a significant portion under the law.  However, if the funds or property have been transferred into a family trust, beneficiaries, who may be family members might still have access however spouses do not necessarily.  As the assets are not in your name but are in fact in the name of the family trust, the trust beneficiaries will be able to keep those assets while your partner will not be able to take any if you divorce.

 

3) When you cannot trust your family to use those monies left to them in a responsible manner. 

If you bequeath money in your will you have no control over how it is spent. Many of us probably know of people that would spend cash as fast as possible rather than save for the future. Instead, by having that money within the family trust, the rules of the trust can allocate portions of the assets over time so that person will not be able to spend it all at once. Instead, they may have the benefit investment returns that the trust generates, or be allocated a lump sum at a particular stage in their life for example, on reaching a certain age.

 

So, as I outlined at the top, you now know a few reasons why some people opt to put their property and financial assets into a family property.  Keep in mind that the purpose of the trust needs to be clearly set out and that proper due process and administration is maintained otherwise you risk defeating the very purpose of setting up the trust in the first place.

 

North Shore trust lawyerIt is highly recommended that you make an appointment with a good trust lawyer and work through with what your motives and what the end goal for managing your assets.  While a family trust is a good way to protect assets, it can also be restrictive.  There are other considerations that you will also have to make such as the cost of having the trust set up initially then monitored and reported on.  Having a trust set up with correct documentation can be an expensive process.  There is also the financial management of the trust. Questions to be dealt with such as who have the financial rights to reinvest any monies that have been generated through the investments tied to the fund.  Who will have approval over these areas and who will have the role of notifying the family members regarding their personal tax during times when profits are being made

 

If you feel that after reading the above that you still need to pursue having a family trust being set up for you then you will need to make an appointment to see a North Shore trust lawyer that specialises in this field.  You will want to make sure that any financial decisions you make are right for your circumstances as any Trust Deed that you sign is binding, and will be for the long-term.

 

McVeagh Fleming

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