What Is A Family Trust And How To Know If You Need One
To start with, let’s define a family trust to ensure that everyone understand what this is about. Next, we will talk about whether you need one or not. In a nutshell, a family trust is a trust one decides to set up to protect the assets of their family for its current members but also for future ones. This doesn’t sound like rocket science, does it? If things are this simple, how comes we don’t all have a family trust? Here are some ideas coming from a South Auckland family trust lawyer. Keep in mind that the following ideas can’t replace legal advice. If you need to know more about all these, you should ask a family trust lawyer.
Protect against legal claims
Let’s see what are the main reasons for going through the effort to have a trust set up. Then you can decide whether this is something for you. Then, feel free to schedule an appointment with a South Auckland family trust lawyer to have an exhaustive discussion about the opportunity of setting up a family trust.
Here are the main reasons for setting up a family trust:
- To protect your assets against commercial claims
The funds you transfer to a family trust are intangible by law. Should you find yourself in impossibility to repay your mortgage or any other type of debt for that matter, nobody would be allowed to take your property in exchange for repayment. You’d still need to repay your debt, you can rest assured of this. Nevertheless, all assets in your family trust will be protected, so you won’t risk losing everything to the bank or to the debt collectors you owe money to.
- To protect your assets against relatives filing in property claims
Let’s suppose you pass on your assets in your will to your children. Once you pass away, your spouse can claim an important share of this property. If you’ve transferred your funds, assets or properties to a family trust, only its beneficiaries will be able to access it. This may or may not include your current spouse. Since these assets aren’t in your name, your spouse won’t have the legal right to any claim, should you decide to get a divorce. A family trust can protect your children against such claims by your spouse.
- To protect your assets against family members who can’t use them responsibly
A will won’t provide you with any control over how your money will be spent by your heirs. Rather than spending money at the speed of light, you should put it in a family trust to avoid being able to spend it all at once. This is an effective method to protect your family against their lack of responsibility. The trust may either allocate part of the assets over time or provide investment returns to your heirs, in order for them to benefit from this money either in several lump sums at specific stages in their lives, or by the time they reach a specific age.
If, after reading this you think a trust might be useful for you, contact a South Auckland family trust lawyer like McVeagh Fleming. They will be able to help.