This post has nothing to do with my usual topics and is very New Zealand specific but it’s useful nonetheless.
For a number of years now people have transferred assets into family trusts in order to reduce tax, avoid potential future creditors and avoid asset-testing later in life.
I’m a trustee of a few family trusts and am all to aware that the majority of them are run very badly. People seem to forget that when transferring assets into trust, the settlors no longer own the assets. If they continue to make decisions as they did before the transfer, they run the risk of having the trust deemed a sham and overturned.
Good records need to be kept, all trustees need to be seen to be making decisions and those decisions should always be made in the best interests of the beneficiaries.
it’s great to see kiwi Family trust-meister Martin Hawes write an editorial about the issues – check it out here.