Articles related to ‘Trusts’
A question has been asked as to what Family Trusts are for and when you might need one.
Trusts are for the protection of assets. Money, property and investments belonging to a trust are held separately from those for whom the trust has been established (the beneficiaries). Here are some examples of the kinds of protection available:
Creditors. If you are sole trader or a professional without limited… Continue reading
Simon created a family trust, which owns the apartment he lives in. Years after setting up the trust, he met Stephanie, who he subsequently married.
Simon wanted to leave the apartment to Stephanie in his Will, so made a Will from a Will kit that said his entire estate (including the apartment) would pass to Stephanie. Unfortunately, Simon was not familiar with the details of trust law and assumed… Continue reading
A recent unsuccessful appeal against an order removing trustees of an ahu whenua trust under the Te Ture Whenua Maori Act 1993 has illustrated the importance of awareness of, and adherence to, trustees’ duties.
The Court of Appeal upheld a decision to remove the trustees based on breaches of their responsibilities in relation to three transactions:
- The purchase of a mussel farm which lost several million dollars;
Sally and Jim had a family trust that they set up many years ago. They had set up the trust so that their children were the discretionary beneficiaries and the final beneficiaries. At the time they set it up, they had only just had their first child, and the trust simply held their family home.
Earlier this year they bought a rental property in the name of the trust… Continue reading
Peter and Helen bought their family home about 10 years ago. Peter is in business, and at risk of being sued by disgruntled creditors. They were looking for a way to protect their home and began considering a Trust.
Trusts are a common entity in New Zealand and are advisable for a variety of reasons. You should consider setting up a Trust to protect your assets if any of… Continue reading
Anthony and Rosa owned their family home outright and had a couple of small bank accounts. They were both retired, and were concerned that if one or both of them went into a rest home their assets would be used to pay for their care. They went to their lawyers and asked them to transfer their home to their children, thinking that this would mean the asset was no longer… Continue reading
The Law Commission has recently released a series of proposals as part of its review of Trust Law.
The Commission has recommended the following changes …
Trustees will no longer be able to contract out of:
- The obligation to act honestly and in good faith for the benefit of the trustees;
- The duty to adhere to and understand the terms of the
Ron and Andrea had a family trust, of which they and their friend were trustees. Their friend wanted to retire as trustee so they prepared a trustee resolution themselves retiring him as trustee of the trust and thought that was all that needed to be done.
Years later when they went to sell the property owned by the Trust they needed to track down the trustee (who had moved… Continue reading
Trevor and Jill set up a family trust five years ago and transferred their family home to it. Since then they had been gifting $27,000 each per year to reduce the loan from them to the trust that arose from the transfer of the property to the trust. After the abolition of gift duty in October, they gifted the whole amount remaining in one lump sum. They presumed they had… Continue reading
Stephen and Colleen had a family trust and had been completing an annual gifting programme through their lawyers for years. This meant they each gifted $27,000 per year to their trust (the maximum permissible) reducing the original loan balance, to avoid gift duty being paid on the initial amount their house was transferred to the trust for.
Changes to gifting laws, although not yet finalised, are expected to come… Continue reading
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