Benefits Of Setting Up A Trust For People in Albany
Some of the most common reasons for setting up a trust include tax minimisation, protecting family legacies and asset protection. The real estate boom and the rejuvenated stock market has provided a lot of wealth for people and a good way to save the wealth is by setting up a trust. Due to the benefits offered by the trust funds, these are becoming increasingly common among the average Kiwi family.
These trust funds offer one of the best ways to preserve family wealth. A trust is managed by the Trustees who are responsible for ensuring that the income and assets of the Trust are passed to the beneficiaries of the trust. The beneficiaries may include the individuals who have established a trust as well as other people specified by the trustees. Even though a trust has a beneficiary name, the property or money in the trust is usually handled by the trustee with experience in handling money. For this reason, an accountant or a trust lawyer is often chosen as a Trustee. This arrangement ensures that the beneficiary does not act recklessly with the money in the trust fund. Further, having a qualified professional as a Trustee shows the IRD that the Trust is acting correctly within the tax laws of New Zealand.
Types of trust
There are various types of trusts that can be set up. Some of the common types of trusts are revocable trust, irrevocable trust, family trust, fixed or discretionary, trading trust, charitable trust, and numerous others.
All of these set ups have their own advantages and disadvantages. For instance, some of the trusts are beneficial for saving on estate taxes when one of the spouse dies. Similarly, a revocable trust helps in transferring the assets to the beneficiaries without probate process.
If you have decided to set up a trust for a child, it is important to set up the trust in a manner that clearly states how and when the child can receive the income or distribution from the trust revenues. In one type of setup, the money from the trust is given to the beneficiary in the form of an annuity. In another form of trust, a beneficiary gets the access to all of the money in the trust fund, when he or she turns 21. There is no right or wrong way, it simply depends on how you want your child to receive the money.
A trust can protect assets from creditors. However, you must make sure that the trust is set-up correctly so that creditors are not unfairly deprived of their rightful payment.
Also, if there are children from a spouse’s previous marriage, you can ensure that your blood children are the beneficiaries of your estate by establishing a Family Trust.
Be clear about your objectives with a family trust
It is important to keep in mind that a trust fund is different than other financial instruments. For instance, it is very difficult to get back the money put in a trust fund. So, you need to ensure that you have thought about all of the pros and cons of setting up a trust fund for the children, before deciding on a type.
Further, you are no longer the owner of the assets so you cannot buy and sell on your own whim. You must have the agreement properly documented by the other Trustees.
Benefits of trusts
There are many other benefits of setting up a trust. Some of these benefits are:
These offer huge reduction in estate and other taxes. If you do not set up a trust, your estate may end up paying a lot of money to the government in form of taxes.
If you want to keep your assets away from the prying eyes of other people, trust funds offer you the best way to keep your wealth details private.
The trust also helps you in avoiding the delays associated with the probate process. It is especially useful in case you own some real estate in other states.
You can also set up a trust fund to support you in case you are unable to work.
If you have some family members who are reckless with their money and are unable to manage their finances, money in a trust fund with the oversight of an experienced trustee can help them.
Setting up a trust also helps in avoiding any operational disruption when there is a business succession.
Albany Lawyer For Setting-up a Trust Fund
As mentioned above, there are a lot of choices when it comes to setting up trust funds. Choosing among these options is not easy. Therefore, experts recommend hiring the services of a legal professional who has experience in setting up trust funds and is aware of the various pros and cons of each choice. One firm of Albany trust lawyers is McVeagh Fleming. They have a team of lawyers who specialise in this type of work so if you are looking for a trust lawyer in Albany. click here for more details.