Have you been thinking about setting up a trust or wondering if a trust would benefit your business or family?
The purpose of the trust is to protect your assets and assist in succession planning for future generations. There are four types of trusts that are most commonly used in New Zealand.
A family trust is used to protect family assets, including the family home or other investments, for the benefit of the next generation. This type of trust can provide income and capital benefits to its beneficiaries, who can be the settlor(s) themselves, their children, grandchildren, parents or other trusts.
An inheritance trust is generally created by parents for their children. An inheritance trust ensures that their children’s inheritance is protected from future relationships, business partners or creditors; and protects property inheritance from relationship claims if you are expecting to inherit significant assets.
A business trust holds assets that are separate from family and personal assets to protect you from a business failure or major loss and protect your assets from potential creditors. It also provides for succession planning if a business partner dies or becomes incapacitated and may result in tax advantages.
A charitable trust is a formal arrangement set up for a charitable purpose. The benefit of a charitable trust is that as a donor, you can provide long-lasting contributions that continue after your lifetime.