Everything you need to know about Family Trusts

Parties to a Trust Settlor Trustees Beneficiaries PART 1

What is a Family Trust? From taxation perspective; There should be a test individual and a family group. There should be a test individual, who would usually be the Settlor or their spouse and the family group can include: i. Any parent, grandparent, brother, sister, nephew, niece or child of the test individual or the test individual’s spouse; and ii. A range of other family members, as defined in section of Schedule 2 F of the Income Tax Assessment Act 1936.

Advantages Better income distribution Asset protection (eg:- at bankruptcy and relationship breakdown) Estate planning tool Retirement planning tool

PART 2 Information required for a Trust The names of the family members, their age and addresses Who would be the Settlor (s) and who would be the trustees The property and the value of property used to intestate the trust How to mange the trust Bank accounts of the trust When does trust property get vested

Pitfalls to avoid Beware of the implication of “Vesting” Choosing Trustees Investing trust property Changes to trust deed deemed a resettlement Assessing social security eligibility