What is a trust, why should I use one and what sort of protection does it give me and my assets?
I asked Janet Xuccoa, who just released her book Family Trusts 101, to answer these questions:
1 – What is a trust ? It’s a sort of a holding vessel, much like a Ship. The Ship’s Captain and 2IC’s are the Trustees, who are charged with looking after the cargo, being the Trust Assets, for the benefit of the Passengers, being the Beneficiaries.
2 – Why should I use a trust? It’s all about asset protection now and in the future, preservation of assets for the next generation and a safeguard against Government means testing.
3- When should I use a trust ? As soon as you have any assets. Ask yourself, do I want to lose my assets to creditors or the Government? If the answer is “No” to those questions, get armed and get a Trust.
4- When should I use a company ? Companies are entirely different creatures from Trusts but just like Trusts, there are many different types of companies. A company does confer on a Director and Shareholder some degree of protection against liability but it is not a cure for all evils.
5- How common is the use of Trusts in NZ? Trusts are well and truly alive in NZ. Unfortunately, if they were ever tested, it is my view that about 80% of them would fail.
6- What does your book cover? everything you want to know about trusts in New Zealand. For example:
•How Trusts came to exist
•What a Trust can do for you
•Steps to take to place your assets into a Trust
•What a gifting programme is
•How Trustees should act
•What a Professional Trustee can and should do for a Trust
•Whether you need a Bank account
•If financial statements should be prepared for the Trust and much more
Find out more info at www.familytrusts.co.nz or order Janet’s book here. (I do not receive any affiliate commission from this link).
Watch Janet Xuccoa on the Breakfast show:
