Are Trusts past their use-by date?
We've all heard stories where Trusts have been challenged through the courts, and everything has fallen apart. You might be tempted to think that Trusts aren’t worth having.
The problem isn't that Trusts don’t work, but that they are often misused, misunderstood and not properly maintained. Trusts have been around for hundreds of years because they offer protection which can’t be achieved through any other structure.
When Trusts are relevant?
It’s important to consider your reasons for establishing a Trust and whether these mean a Trust will be of real benefit.
Trusts are particularly useful for:
succession planning – passing wealth down through generations;
providing for a family member with special needs;
providing for charitable purposes;
protection against legal action;
preventing creditor claims in case of business failure; and,
preventing claims on property when a relationship ends.
For a Trust to work effectively, it is crucial everyone involved understands their role and responsibilities. One of the most common reasons Trusts fail is a lack of discipline, for example:
no annual meetings;
no minutes or record of decisions;
mixing of personal assets with Trust assets;
spouses acting as sole trustees; and,
a lack of understanding of the Trust deed.
How can we help?
Contact us if you'd like to find out more about a suitable and effective structure to protect your assets, or if you'd like to have your existing Trust reviewed. We can point you in the right direction.