Everything you need to know about Family Trusts

Parties to a Trust

• Settlor • Trustees• Beneficiaries

PART 1

What is a Family Trust?

From taxation perspective;

There should be a test individual and a family group.

• There should be a test individual, who would usually be the

Settlor or their spouse and the family group can include: 

 i.            Any parent, grandparent, brother, sister, nephew, niece or child of the test individual or the test individual’s spouse; and  

ii.            A range of other family members, as defined in section 272-95 of Schedule 2 F of the Income Tax Assessment Act 1936.

Advantages • Better income distribution • Asset protection (eg:- at bankruptcy and relationship

breakdown)• Estate planning tool • Retirement planning tool

PART 2

Information required for a Trust • The names of the family members, their age and addresses • Who would be the Settlor (s) and who would be the trustees • The property and the value of property used to intestate the

trust • How to mange the trust • Bank accounts of the trust • When does trust property get vested

Pitfalls to avoid

• Beware of the implication of “Vesting”• Choosing Trustees • Investing trust property • Changes to trust deed deemed a resettlement • Assessing social security eligibility