If you are in any way interested in protecting your assets and your future, then owning family trusts 101 will be the best investment you will ever make under the leadership of matthew gilligan and john rowe, janet is the. It never fails to amaze me the number of trustees that dont have annual financial statements prepared for. Anyone can use a discretionary trust but the beneficiaries of trusts are usually all part of the one family or extended family. This article will discuss the basics of the various types of trusts, what can be accomplished with each, and how they are created. Legal advice with respect to forming your family trust. These are often called family trusts because they are usually associated. The use of family trusts page 3 the structure would look as follows. A family trust, sometimes called a family trust fund, is a legal device used to avoid probate, avoid or delay taxes, and protect assets. Trusts 101 a guide to what they are and how they work in australia with all the talk about total super balance caps and where people will invest money going forward if they cant get it in to superannuation, the spotlight is being shone on trusts at present. If you are adjudicated a bankrupt any gifts made by you to a family trust within 2 years of your bankruptcy can be challenged by the official assignee under the insolvency act 2006. Family trust by kathy wang theres nothing like the specter of an inheritance to bring old family resentments to life, as the huang family discovers in kathy wangs funny and perceptive debut, family trust, a multigenerational saga about a family of taiwanese immigrants in silicon valley.
Each childs trust is a beneficiary of an equal share of the parents retirement accounts. Family trusts 101 by janet xuccoa is written in plain english with practical advice for anyone wanting to protect their future. The family in question is the huangs, although theirs is a closeness borne more of dna and marriage than actual affection. When our assets are in a family trust we no longer have legal ownership of them the assets are owned by the trustees, for the benefit of our family members. Estate planning 101 from elder law attorney sean w. A trust, by definition, is a legal instrument created by a lawyer. At the spouses death, the trust divides into a separate trust for each child and for the surviving children of a deceased child. A trust resembles a corporation in that it is a separate entity that can own, buy, sell, hold and manage property according to a. Meghan maclain weir, author of the book of essie a sharp, spirited and. An insightful and practical guide to family trusts. It is critical that a family trust maintain proper books and records. Family trusts 101 intelligent investor in conjunction. Janet xuccoa if you are considering purchasing assets, including property, or if you are thinking about protecting your assets, then this is a must read for you.
The settlors assets are then transferred to the trust. And when you read the last sentence, you immediately want to start the book over to catch the subtle nuances that you might have missed as you raced through the pages to see what happens next. A family trust, like any other trust, requires three main. Estate and trust administration for dummies, 2nd edition. Trusts allow you to transfer ownership of property or money to a person who is designated to manage and distribute the assets according to your instructions, for the benefit of another. Bank statements should be retained for the trust, along with returned cheques. We make things easy for you and can provide independent specialist trustee services for the life of your family trust. For years, stanley has claimed that hes worth a small fortune.
The main advantages of a family trust are the way in which the profits are distributed, while still providing for asset protection if youre using a corporate trustee. Where you are so engrossed that you miss your train stop. Family trust offers an exquisite rendering of the way relationships evolve and are nurtured over a lifetime, and of the circumstances that either draw individuals closer or drive them apart. She lectures for the irs annually at their volunteer tax preparer programs. But family trust gets only so much out of the minutiae. Grantor and nongrantor trusts for tax purposes, the key distinction in a family trust is whether it qualifies as a grantor trust. Family trusts can be testamentary arising on death or inter vivos used while alive, but the case studies below focus on uses of inter vivos family trusts.
Since blended families are the new normal, negotiating spending quality time with two sets of parents and steprelatives can be challenging and potentially packed with spectacle. It will help families create and administer a culture that recognizes trusts as a gift of love. Family trusts are designed to protect our assets and benefit members of our family beyond our lifetime. A family trust is used to pass assets on to family members or other beneficiaries and may be set up as part of an estate plan. This book, by author nick renton, and newly updated by rod caldwell, provides the information you need to make an informed decision and ask the right questions. People usually set up a family trust to get some benefit from no longer. The amounts received by the children from the family trust could be used to pay certain expenses, which would otherwise have been paid by the parents. The financial impact of battling over family estates.
Family trusts is a stepbystep guide for anyone involved in family trusts. Family trust funds in decline as tax liability rises. Read on for some of the basics of funding and managing living trusts. A complete family trust records book, to keep better records of your family trust, and to make it easier for you to instruct accountants and the like in the future. As i read kathy wangs book, i kept thinking of its title. If you are thinking of setting up a family trust in the near future or already have one, this book will be a very worthwhile read.
A trust resembles a corporation in that it is a separate entity that can own, buy, sell, hold and. We are not just clever accountants at gra, we help people protect their assets and grow their net worth. Margaret atkins munro, ea, has more than 30 years experience in trusts, estates, family tax, and small businesses. Hi tezz its important to understand that a family trust isnt just one method. Once the creator has signed the trust document, though, what comes next. With respect to financial statements for the trust, janet xuccoa of the wellknown property accountant firm gra writes on page 117 of her book family trusts 101. Investment aspects and the taxation and social security rules affecting trusts and their beneficiaries are covered. In such a situation, the parents could control all decisionmaking by owning the voting shares. In family trust, kathy wang interweaves family drama with the complex estate planning decisions that often arise in melded families. In addition, a parent may be one of the trustees and participate in the decisionmaking on the eventual distribution of the income and capital of the trust to the beneficiaries.
There are different types of family trusts you can set up, including how you fund it. Members of a chineseamerican family based in silicon valley deal with the passing of their patriarch. Family trusts 101 intelligent investor in conjunction with good. The use of family trusts chartered professional accountants. On several occasions i have tried to make sense of the trust deed but as with many legal documents i have been foiled by the olde english legalese jargon.
In addition to using a family trust to avoid probate, some people use it to provide for the grantor or other family members who are unable to make financial. Its best to sit down with a trust attorney and let him or her know what it is you want to do, and let them tell you what kind of trust to set up. The use of family trusts ggfl chartered accountants. Funding and managing a living trust a living trust, also called an inter vivos trust, is one of the most flexible options available for estate planning. Understanding trusts a trust is one of the fundamental documents of estate planning, but they come in many forms, from revocable and irrevocable trusts to living and testamentary trusts. Setting up a trust requires sound advice and legal expertise. Stanley has cancer, an illness that almost delights him at first. Many people set up trusts in order to manage their assets while theyre living, and to transfer those assets at the time of their death.
The book details all aspects of both setting up and running a family trust, including discretionary. A plain english guide for australian families of average means, 5 th edition is a comprehensive guide to the advantages and disadvantages, investment nuances, taxation regulations, and social security rules surrounding trusts. Family trusts are designed to provide for or distribute wealth to your surviving family members in the event of your death. Family trust federal credit union does not provide, and is not responsible for, the product, service, overall website content, security, or privacy policies on any external thirdparty sites. Property accountant property accounting specialists gra. Silicon valley, with all its excesses, lies at the heart of kathy wangs insightful, witty and acutely honest debut novel of a chineseamerican family in crisis mode.
A plain english guide for australian families ebook. It shows that family trusts have sharply fallen out of fashion. Written by attorney jeffrey scott galvin nov 6, 2011. A guide for beneficiaries, trustees, trust protectors, and trust creators bloomberg. Family trust is a generic term used to describe a number of different trusts that provide for minor children, widows and widowers, and surviving adult children.
Balson, the international bestselling author of once we were brothers, finds private investigator liam taggart returning to his childhood home for an uncles funeral, only to discover his death might not have been natural. Hes the kind of guy who demands certain coddling, certain attention and unearned. We manage thousands of family trusts each year and are new zealands most experienced trustee organisation. This fourth edition this practical book will help families to decide whether to set up a family trust, to understand the advantages and disadvantages of this useful legal concept and to discuss the issues more intelligently with. However, family trusts are a legitimate way of protecting you and your family from new claims, which may be made against a beneficiary in the future. Read unlimited books and audiobooks on the web, ipad, iphone and android. Even for families of average income, trusts deserve a second look. Reading kathy wang s novel family trust is like peeking into the window of a home and watching a real family in action.
Estate and trust administration 101 get the lowdown on estate and trust. Joel carrettaap family trusts often cause more harm than good. Family trust in australia explained the family trust, commonly set up and sometimes referred to as a discretionary trust, are a popular business structure in australia. Each child is his or her own trustee and the trusts will last their entire lifetimes. Mom and dad might opt to name a third party professional to act as successor trustee, or the family member selected to serve as trustee may choose to step aside in favor of a professional. Oh but our trust only owns the family home so we dont need all that.