Tammy McLeod (BA LLB) is a director at Davenports Harbour and a trust and asset structuring specialist. Tammy leads the Davenports Harbour Trust Team and enjoys providing clients with advice and assistance on a broad range of issues involving the structuring and establishment of asset plans, interpretation of trust deeds, the management and administration of trust funds and trust disputes. An important part of Tammy’s practice is reviewing existing asset holding structures to ensure they achieve the needs and requirements they were established to meet. She is also experienced in Property (Relationships) Act issues and advises clients on both contracting out agreements and separation. Tammy is a past president of the Auckland Woman Lawyers’ Association and is the current vice-president of the North Harbour Club.
George and Donna owned their family home freehold. They had worked hard over the years, George for a small mechanical engineering company and Donna as a nurse at North Shore Hospital. They had two daughters who were both at university studying. Their home which they had bought for around $350,000 many years ago was now worth $1.5m. Their Kiwisavers had built up over time and they had around $150,000 saved in a term deposit.
Many of George and Donna’s friends had trusts and one friend in particular had been encouraging George and Donna to go and talk to their lawyer about setting up a trust. One of their big concerns was that they had worked hard to build up their assets and if both of them died, they wanted to make sure that their daughters’ partners would not be able to benefit from the assets they left their daughters.
George and Donna went to see a lawyer who specialised in trusts who had been recommended by their friend. She advised them that yes, they could set up a trust now and that would also provide protection in the event that one of them died and the survivor met someone else, the trust would help protect the assets from a claim by a new partner. She also explained that the trust would be a good platform to distribute assets to their daughters in the event that had both died, in a way that would protect those assets going forward.
However, the lawyer did explain to them that if protection for their daughters was their priority they could achieve that by having well-crafted wills. She explained that they could change their wills so that instead of assets passing directly to their daughters upon the death of the survivor of them, the wills could say that trusts would be established for their daughters at that time. Those trusts would be inheritance trusts and would be designed to protect their daughters’ inheritance from their partners or husbands at that time.
This idea appealed to George and Donna as it was a more cost effective way of achieving the result that they wanted. They instructed the lawyer to go ahead.
It’s important to remember that trusts are not for everyone and are not the only way of achieving excellent estate planning. George and Donna did the right thing by getting specialist advice.
