Trusts

Family trusts have been used for many centuries for many purposes. They may be very complicated or quite simple, depending on what you are trying to achieve and what assets and liabilities you have.

In its simplest form, a “trust” is established when one person agrees to hold property for another. There doesn’t have to be a trust deed but it is a very good idea (in a family trust there is always a deed). That’s because the person who used to own the property (the “settlor”), the trustee, and the “beneficiary” all need to know that the trustees will do the things they should.

There are all kinds of trusts (charitable trusts, superannuation schemes, welfare funds, unit trusts and will trusts) but we will be talking here about “family trusts”. These are started within a family and the beneficiaries are restricted mostly to just family members.

The aim of a family trust is usually either for you to own fewer assets in your own name or to make sure that assets are owned “appropriately” (depending on your purpose). In fact, some people want to own nothing and have the family trust own everything.

A trust is unique in its flexibility in that you do not own assets (the trust does) but you can still have use and even some control over the assets, providing the trust allows it. For example, if the family home is in a trust, you will not own the house but you will most probably still live in it.

In this section you can also read about:

• Creating a trust
  Find out who and what's involved.
• Advantages
  People form family trusts for all sorts of reasons. Find out what the most common advantages are
• Disadvantages
  Read about the costs, demands and loss of control over assests
• Asset gifting
  Most people gift away the debt that the trust owes them. Find out how this works
• Costs & Risks
  The costs of forming a trust can vary hugely
• Managing trusts
  Being a trustee means looking after other people's assets
• Getting advice
  Make sure that the individual you choose is experienced in trust work