Asset protection – 3 minute read
#1. Benefits of a corporate trustee
Corporate trustees are companies created to manage a trust on behalf of the beneficiaries.
The assets of the trust must be registered in the name of the company.
You may opt for a corporate trustee to manage your family trust because it offers more flexibility for estate planning, tax benefits and limited liability.
A corporate trustee does not end if a director dies. This makes succession and control of the trust easier because there is no need for the court or appointor to assign a new trustee.
Assets are less likely to be intermixed, as personal assets are held separately.
A corporate trustee may be the right choice when having a family member or loved one serve as trustee isn’t advisable, such as when such an individual could be adversely influenced in the management of the trust or is not capable of staying on top of the financial and administrative aspects of the trust.
#2. Disadvantages of a corporate trustee
The disadvantages of a corporate trustee are the costs involved in setting up this legal entity and maintaining its records.
Another possible drawback is that corporate trustees might not be as familiar with the goals, desires, and concerns of trust beneficiaries.
#3. What is a Family Discretionary Trust?
A family discretionary trust is an arrangement where one or more people (called ‘trustees’), manage property or investments for the benefit of one or more people (called ‘beneficiaries’).
You can think of a trust as a container to manage assets on behalf of a group of people – typically members of your family, and you progressively transfer your assets into that container (the trust), so that legally you do not own those assets yourself, but you can still, through the trust, have some control over, and get the benefit of, these assets.
The fundamental idea is that you control assets but do not own them in your own name, so that if you or your estate are sued (creditor, litigant, bankruptcy, divorce, challenge to your Will or estate) then they hopefully cannot get their hands on the trust assets because they do not belong to you.
This advanced estate planning technique may be worth considering, especially as you continue to acquire assets throughout life, and if you like the idea of asset protection from creditors and predators.
Trusts are all about planning, not only for your own future, but also the financial well-being of your family and loved ones after you’re gone.
The realities of life – divorce, second marriages, step kids, long-term illness and other family changes – can sometimes make life and plans unpredictable.
It’s when the bad stuff happens that you wish you’d had the foresight to do some planning before the disaster struck!
Protecting your wealth & assets and the financial well-being of your family is about a lot more than simply parcelling-out your assets – it’s about providing for yourself & your family members in a way that’s responsible and specifically addresses your personal situation.
Many people make the assumption that estate planning and trusts are only for incredibly rich people. That is wrong.
A family discretionary trust is a very versatile estate planning tool that allows you to address inheritance goals for your beneficiaries – who may still be children, are disabled, are from a blended family, etc – and a trust might be the answer to difficult questions like who will manage your assets if you or they become incapacitated.
#4. Conclusion:
In summary, trusts in Australia do not automatically form part of your personal or deceased estate due to its unique nature, governance by trustees, and separate regulations.
Taking specialist estate planning advice empowers you to take control of your estate planning and secure the financial future of your loved ones.
By carefully selecting and implementing the correct advice, considering tax implications, and embracing comprehensive estate planning, you can maximise the distribution of your assets. Take charge today, and secure your legacy for tomorrow.
Contact the oldest law firm in South Australia – Genders and Partners, established 1848, to learn more about asset protection, trusts, superannuation, estate-planning and estate-administration solutions, by visiting our website today and schedule a free no obligation telephone consultation to find out how we can help you and yours.
This article should serve as a strong warning that a Will alone is not the only document you need for an estate plan. Without a trust, death benefit nomination, Advance Care Directive, power of attorney, or guardianship you may not be providing for your family as you intend.
Remember – any mistakes you make in your estate planning or your Will won’t become apparent until after you’re dead, and it’s too late for you to fix them.
It is also vitally important that you keep your Will and estate plan up to date – it is not a set-and-forget exercise.
To learn how to protect yourself, your family and your assets, by creating a professionally-made estate plan, claim your FREE 15 minute Telephone Consultation
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