Trusts have dominated our landscape for eons and for good reason. Their longevity relates to the flexibility they possess. They’ve been able to accommodate society’s altering morals, values and conventions over the passing of time. They’ve also been able to adapt to and satisfy the varying and growing needs individuals and business have.
Despite their ever-changing nature, motivation for establish trusts has remained relatively static. Goals include asset protection, acting as a vehicle to conduct business through and managing estates and taxation responsibilities. In New Zealand it is commonplace to find discretionary trusts assist in achieving these aims often referred to as individual, family, business and inheritance trusts. Keep reading to understand the benefits each of these trusts brings.
Often considered the cornerstone of an individual’s financial life, family trusts are used to hold passive assets such as homes, baches, cash and life insurance policies. Holding assets within a trust, can permit attainment of several benefits such as:
Ultimately family trusts protect assets and preserve wealth for individual/s and their family, for today and for tomorrow.
New Zealanders epitomise the spirit of entrepreneurship. Our business community is full of bright people engaging in small and medium size businesses, frequently through the use of trusts. Businesspeople often trade through companies, holding theirs shares in a business trust. Alternatively, the business owner may elect to have the business trust conduct the business. In either case, a business trust can provide the following benefits:
Undoubtedly inheritance trusts have gained in popularity in recent years. This is due to two factors. Firstly, their ability to enable the smooth transition of wealth from one generation to another. Secondly, their means of transferring funds from parent to child facilitating children purchasing assets such as their first home. The inheritance trusts rise in popularity due to this latter reason makes perfect sense as child recipients often benefit to a greater degree if they receive an inheritance during their early to middle years than waiting until a parent has died. Other benefits include:
Now you’ve read about the benefits trusts can bestow, you may be able to judge if a trust is right for you. A factor you should take into account when making your decision is a trust must be administered and managed correctly for those benefits to endure. We’ve elaborated on this point on this website so keep reading.