The Importance Of Using A Warkworth Lawyer When Creating A Family Trust
Making sure that your wishes are adhered to once you are no longer around is one of the best things that you can do for your peace of mind as well as for your family. All too often people are not prepared for the inevitable and leave their family to figure it out for themselves. Generally, those who do think about what happens to their estate will have a will drawn-up. However, wills are often contested and end up going to court which is extremely expensive. One way to ensure that your wishes are met is to have a Family Trust set-up by a Warkworth family trust lawyer. Here we look at what a trust is, how it works and some common reasons to have one drawn-up.
What is a Family Trust?
A Trust is an entity that owns assets on behalf of settlors for the benefit of beneficiaries. In plain English, if someone (the settlor) owns assets, they sell those to the trust which holds and administers them so that other people will benefit from the value of those assets at some stage in the future.
For example, if someone wants a child to have a lump-sum or an annual income from cash, then they can have the cash in the Family Trust and specify that the child or children can receive their benefit from a certain age. This is a good idea because it means the beneficiary cannot spend all of the money at once or they will receive it when they are more mature, say in their 30s.
If you meet a Warkworth family trust lawyer, they will be able to explain in more detail what a trust is and if it is suitable for you.
How Does A Family Trust Work?
When the assets have been sold to the trust, the Trustees are responsible for the management of the trust. This doesn’t mean they have to actually manage it as they can for example, hire an accountant or a lawyer to administer the Trust.
Trustees must manage the investments of the trust wisely nor should the Trustee benefit from those investment.
There are various other requirement of Trustees which puts more onus on them to act appropriately with complex legal requirements for managing a Trust. This means that it is even more important to have expert advice and administration of the Family Trust. Having an expert trust lawyer in Warkworth takes that work and risk away from you.
A Trust will also likely have tax advantages over personally owned assets or income. Currently, a Trust pays tax at 33% instead of the top rate of 39%. An expert trust administrator will make sure that your trust is in the best position for your estate when it comes to taxes.
Trust laws have also recently changed in New Zealand so it’s important that your current or new trusts adhere to the new legislation. A family trust lawyer in Warkworth will understand just how to navigate the new 2019 Trust Act so that you can be confident that your estate will be managed properly and doesn’t fall foul of the law.
Why Have A Family Trust?
Perhaps the biggest benefit of having a Trust is that no-one or no other entity can make a claim on those assets.
Another aspect of a trust lawyer’s responsibilities is to reduce, and ideally eliminate, the ability for anyone to bring a lawsuit against the trust in the future, particularly after your death.
While no one wants to believe that a family member will attempt to go against their personal wishes after they pass, it is something that happens rather frequently.
Other reasons to have a Family Trust might be do with second marriages or de fact relationships. For example, your wife or partner may not be the mother of your children. You may want your wife to receive an annual income while she is alive. However, if you leave your estate to her in a will, then there is no obligation on her part to leave any of that to your children when she dies. If you have your assets held within a trust, she can be paid an annual income while she is alive or not in a subsequent relationship, preserving the remaining assets for the benefit of your children.
Family Trusts, their uses and the management of them is a complex area which require expert people to advise and manage. If you have a Family Trust or want to have one established, talk to a Warkworth Family Trust Lawyer who can help. McVeagh Fleming operate in the Warkworth area and will be able to help.
This is not legal advice and you must consult a qualified lawyer.