Blog

Providing for my Children

 

How does a Family Trust leave me able to provide for my Children?

 

Family trusts are more than just a form of asset protection and a means of preserving wealth for future generations; they can also serve as a tool for wealth management. How can you use family trusts to provide for your children and ensure that they are cared for in your absence? You might not think your assets are worth protecting, but if you have a family home, money set aside in retirement accounts, and other assets of monetary value, you shouldn't be surprised that claimants would come out of the woodwork to get a piece of the pie following your demise. Ex-spouses, creditors, and business interests could all come after your estate in the wake of your death, in some cases with legitimate claims for repayment of debts, for example.

 

Ensuring your children are cared for

 

If you want to ensure that your children are cared for and that their inheritance is protected, the least you can do is set up a family home trust. If nothing else, you want to make sure your children are able to enjoy continued use of the family home in your absence. You can do more, though. You can, for example, place income-earning assets in your trust as a way to pay for ongoing costs of administration, as well as grow the value of the trust. The trustee you choose as an administrator will make decisions on behalf of the trust (per your instructions, in some cases), ensuring that wealth is preserved and even increased for beneficiaries.

 

Avoiding end-of-life costs

 

In addition to offering these benefits, family trusts can also help to avoid end-of-life costs such as probate. Although a death tax no longer exists in New Zealand, passing along wealth and assets via a last will and testament entails probate, whereby a portion of the value of an estate will be subject to probate costs. The best way to ensure that everything you leave to beneficiaries is passed on to them is to protect your wealth and assets with appropriate trust structures. Not only will you have the best chance of keeping wealth out of the hands of unnamed claimants, but you can also avoid end-of-life expenses.

 

Why you don't own assets in your personal capacity

 

Finally, you can maintain some control over your wealth and assets during your lifetime, even though they are technically "owned" by the trust until such time as they are passed on to beneficiaries. This means you and your children can continue to live in the family home and in some cases, utilize wealth or other assets held in trust. A will does not grant you the same protection to provide for your kids now and in the future.

 

So why not learn more and register with TrustUs today.

After all, it's in your hands.