With the wave of changes implemented by governments over the last few years and legal cases where former partners have successfully attacked an ex-partner’s Trust, it may have crossed your mind whether trusts still have a purpose and if so, whether they are worthwhile. There has also been a noticeable increase in the cost of trust administration and compliance due to greater obligations on trustees; given the current economic climate these additional ongoing costs may be challenging for some families.  While these factors may cause you to hesitate as to whether you should set up or continue a trust, you shouldn’t discount the valuable protection a trust can offer you and your family, depending on your situation.

Over the past few years, the legislative changes have forced settlors and trustees to look closely at their trust and consider why they have one. This has resulted in many ‘mum and dad’ trusts being wound up as their purpose to protect certain assets and beneficiaries was no longer appropriate or necessary. However, while you may think trusts are less fashionable, they still provide significant value in the right circumstances.  
The advantage of having a trust continues to be around the issues of asset protection, succession planning, provision for vulnerable beneficiaries, inter-generational wealth management, and flexibility. So, if you are looking to protect your assets from potential claims by creditors or future relationship partners, or decrease your asset exposure to business risks, preserve family wealth for future generations, or to hold family specific assets such as a holiday home or a bespoke business, or to safely provide for beneficiaries with special needs, or to protect vulnerable beneficiaries from themselves or scams, or simply to set money aside to pay for grandchildren’s education, then you need to consider the benefits of having a trust.  
A family trust is designed to protect assets and benefit your family both during and beyond your lifetime. They continue to remain relevant and important in the scheme of asset planning and protection. If you have a genuine need and legitimate motivation to create a trust, then the benefits of a trust will outweigh the cost and time to manage it. Like any legal structure, trusts are vulnerable to attack and for this reason safeguards may be implemented on the creation of a trust to reduce any challenge. Despite transferring legal ownership of assets to a trust you can still retain the benefits and enjoyment of the assets as a beneficiary. Considering whether to form a new trust or continue an existing trust is a big decision so it is important to speak to a lawyer and an accountant to enable you to consider the particulars of your situation and make an informed decision on whether a trust is right for your individual needs  If you would like to have an initial chat with one of our trusts team, give us a call.

Schnauer & Co,
1 Shea Terrace, Takapuna
09 486 0177
schnauer.com