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.
Sally and Nathan had been married for 22 years and had two daughters in their late teens. Their eldest daughter was in her second year training to be a teacher and their youngest was in her last year of high school. Sally and Nathan had worked hard over the years, Sally also as a teacher (their daughter was walking in her mother’s footsteps) and Nathan as an operations manager in a local company. They had paid off their mortgage, had some savings and both of them also had good superannuation schemes.
Many of Sally and Nathan’s friends had trusts, and as they had sizeable assets, Sally and Nathan decided to go and see a trust specialist lawyer to see if they needed one. Their big concerns were what would happen if one of them had to go into resthome care (this was pretty close to their hearts as Sally’s mum had just gone into care with early onset dementia) and also they wanted to make sure that whatever they passed on to their girls would be protected for them from any relationship splits.
When Sally and Nathan met with the trust lawyer she explained that while she was a trust lawyer and loved trusts, they weren’t necessarily right for everyone, and that estate planning encompassed a lot more than just setting up a trust. She told them that transferring your assets to a trust would no longer stop you from paying for your own rest home care if you had the money to do so, and in fact it could actually be detrimental to have your family home in a trust if one of you went into care.
A trust is a really good platform for protecting assets for children from their future partners. However, the lawyer explained that Sally and Nathan didn’t necessarily have to go to the expense of setting up a trust for those purposes now. They could instead change their wills, so instead of leaving assets directly to their daughters, trusts would be set up for the girls to receive their inheritance into on the death of the survivor of Sally and Nathan.
This seemed like a great solution for Sally and Nathan – it was a cost effective and simple way to achieve what they wanted.
It is important to remember that trusts are fantastic, flexible structures, but are not right for everyone. Sometimes some simple changes to your will can better effect what you are wanting to achieve.
