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Setting up a family home trust

Is one of the best decisions you will ever make for your family's future. It protects your home and any other assets you choose to transfer in the future. But how does it work? How can you establish a family home trust?

How a Family Home Trust is created

A family home trust is created when a person (the settlor) transfers his or her home to a group of people called trustees. By law, trustees are obliged to use the property in a way spelled out by the settlor, principally to act in the best interests of the people called beneficiaries. Family home trusts are like all other family trusts, with the settlor normally being the parents and the beneficiaries being their children and future grandchildren.

The details of a family home trust are outlined in a document called the trust deed. Usually, the purpose of a family home trust is to protect the family home down the road, but there are many different trust terms as there are families. Again, the genius of a family home trust lies in the settlor's ability to be very specific about details in the trust deed.

The major players

The whole purpose of a family home trust is to transfer your family home and other assets to your children, grandchildren, and great-grandchildren. This way, the beneficiaries can be named as individuals or as a group, such as "grandchildren". A family home trust usually has two trustees, and they can be relied upon to manage the trust according to the letter of the deed. Trustees are often the settlors of the trust.

How long does a Family Home Trust last?

The legal limit is 80 years, and an end date (known as the date of distribution) must be stipulated in the trust deed. Trustees sometimes have the power to end the trust early or extend it, as long as it doesn't exceed 80 years. For the entire term of the contract, the trustees are the owners of the property, and they can do anything with the property that owners can, such as raising mortgages. Kiwis are increasingly turning to family home trusts to protect their property and manage their assets. A whopping 20 percent of New Zealand homeowners have already placed their family homes in a family trust.

With the opportunity to set up your own family home trust hassle-free at your fingertips online... what are you waiting for? So why not register with TrustUs today.

Its in your hands.