We consider trusts to be a key component in any estate planning, serving as a tool to safeguard assets, manage wealth, and guarantee that beneficiaries are granted their rightful inheritance, in accordance with the wishes of the settlors—the individuals who establish the trust.
Structuring a trust begins with the settlors transferring property or assets to trustees, who are legally obliged to manage these assets for the benefit of the beneficiaries as specified in the trust deed. This legal document outlines the terms of the trust, the duties of the trustees, and the rights of the beneficiaries.
Beneficiaries can be categorised into different types, each with varying rights and entitlements:
• Primary beneficiaries are those who have the first claim to the trust's assets, often family members for whom the trust was established.
• Contingent beneficiaries are second in line and may inherit if the primary beneficiaries cannot.
• Discretionary beneficiaries are those whom the trustees have the discretion to provide for, depending on the terms set out by the settlor.
Trusts are governed by the Trusts Act 2019, which applies to all express trusts, including family trusts. It is crucial for settlors and trustees to review their trust deeds to ensure compliance with this legislation. Trusts can be established for various purposes, such as asset protection, generational wealth transfer, or charitable objectives. The flexibility of trusts allows for customised solutions to meet the specific needs and goals of the settlor.
When setting up a trust, it is prudent to obtain legal advice on how to navigate the complexities of trust law, and to draft a trust deed that accurately reflects the settlors’ intentions. This ensures that the trust operates effectively, and that the beneficiaries' interests are safeguarded. With careful planning and structuring, we believe trusts can act as a strong vehicle for asset management and protection, providing peace of mind for both the settlors and the beneficiaries.
We have the expertise to help you set up the right trust for your needs - contact us to discuss protecting your assets!
