Trusts are usually set up for five main reasons:
In New Zealand there is a widely held view that trusts are the best general-purpose asset protector. However, even the experts hold widely differing views of the efficacy of trusts. Law changes to trusts will come into effect in November 2011. At the moment, you can only gift up to $27,000 per year without paying gift duty. After November 2011 there will be no such restriction.
But is a family trust right for you? It really depends on your situation. Say, for example you are self-employed a trust could benefit you by protecting your family home from creditors should things go awry. Trusts can also be useful if you’ve got a family and have large assets and you will be lending money to the next generation, and want to make sure that money stays within the family.
The dilemma about family trusts is, like wills, they’re set up to protect and disperse assets in a way that safeguards the signatories, however these documents are only as safe as current legislation makes them. To understand your options, you need to consult with an expert. While Iconic Financial is not registered create family trusts we can steer you in the right direction if a family trust is the best option for you. Call us today to see how we can help you.