A lot learned from REAL Chartered Accountants Trusts Seminar
Mike Dorset from JR Legal joined the REAL Chartered Accountants team to share his knowledge and advice on Trusts as well as updating us on the new Trust Act 2019. We've outlined a quick summary of the key out-takes from his seminar here...
- The purpose of a Trust is move wealth away from an individual. Reasons for setting up trusts can include protection of assets from creditors, relationship property, provide for children’s education, provide protection for disable or mentally challenged family members, protect inheritance for your children from their spouses, to be able to choose not to leave wealth to particular child or family member who can otherwise challenge your will.
- A Trust can be set up at any time so if you are young and have a home with a large mortgage, setting up a trust is probably an unnecessary expense. Likewise, if you are on salary & wages and aren’t at risk of creditors, happily married etc then a trust isn’t necessary.
- The long-standing Trust bill has now become the Trust Act 2019, and comes in to effect 30 January 2021. A short summary of the new Trust Act 2019 are detailed in our blog post here.
- Trusts are not a vehicle to enable you to have access to Rest home subsidies. The Ministry of Social Development will look at areas of your trust such as gifting, loans, assets etc.
- If the reasons you originally set up the trust are no longer relevant, potentially you may want to consider winding up your trust. This process isn’t very difficult and there are a couple of ways you can do this.
The biggest take home from our seminar was talk to your accountant or lawyer – everyone’s trusts and needs are different. If your friend or family member has a trust it doesn’t necessarily mean you need to have one too.