Setting Up A Family Trust: What You Need To Know

Setting Up A Family Trust: What You Need To Know
A trust is a legal arrangement that protects a property and other assets while you are alive and ensures it is available for the people you want to benefit after your death. When you set one up, your assets no longer belong to you but to the trustees that you determine. Not everyone needs a trust, but many people may benefit from no longer owning their assets personally. Let us explain what’s involved in setting up a trust in New Zealand and why you might want to create one for yourself.

Good reasons for setting up a trust

A trust is not necessary for everyone who owns a property and other large assets, but you might want to think about it if you are in one of the following situations:
  • You are self-employed: If your business fails, you want your home and other properties and assets protected against creditors. A trust ensures that they won’t have any access to your assets.
  • Provide for your family members: If you create a trust, the trust continues to hold the assets and property after you die. It ensures that even when you’re gone, your family will benefit from your assets.
  • Manage assets for a family member unable to do so: A trustee can handle asset protection and management when a person isn’t able to do so on their own because of a disability or illness.

What is involved in setting up a trust?

There are four essential elements to a trust that you need to have before starting a journey:
  • Trustee: The trustee legally owns the property and assets and holds it on behalf of the beneficiaries.
  • Property and assets: There needs to be an asset that can be owned, such as a house, land, shares or money.
  • Beneficiary or beneficiaries: You need to have a reason for setting up a trust and people who will benefit from it and, potentially, become the owner of the asset.
  • The trustee has to manage the assets for the purpose of the trust.
You can set up a trust during your lifetime, it will contain all the necessary information in a written document, including the names of the trustees, beneficiaries, details about how and when the assets should be distributed, a thorough description of the properties and the rights and responsibilities of trustees. Anyone with legal capacity and assets can establish a trust, but it is important to have legal support from a lawyer, as it can be a very complex matter. They will ensure that all necessary information is included, that your trustees know their duties and that there shouldn’t be any problems with anyone involved in the process. Always seek legal advice before setting up a trust to ensure that your assets will be protected and distributed to the people you want even after your death. Hayman Lawyers are specialist trust lawyers who can support you when setting up a trust. Get in touch with us if you are thinking about establishing a trust for your assets, and we will be happy to help!
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