Family Trust Advantages
There are three main advantages of family trusts:
- Asset Protection: Family trusts are popular structures for protecting assets from bankruptcy or business failure. They may also be used for protecting family assets from future marriage breakdowns. Holding assets in a family trust can also assist in avoiding challenges to a Will since any assets held in the family trust will not form part of a deceased estate.
- Protecting Vulnerable Family Members: Family trusts can be beneficial for protecting vulnerable beneficiaries, like a child with a gambling addiction. They can have access to income but no access to a large capital sum that could be quickly spent.
- Tax Benefits: Family trusts may also provide tax benefits to enable the family group to manage the tax of the family unit.
Family Trust Disadvantages
There are, however, several disadvantages of family trusts:
- Any income earned by the trust that is not distributed is taxed at the top marginal tax rate
- Distributions to minor children are taxed at up to 66%
- There are costs involved for establishing and maintaining the trust
- Family disputes may arise regarding how to run the trust.
What We Can Do For You
The team at Woodlands are highly experienced and have practised in Family law area for more than 25 years. Contact us today to book an appointment, and we can discuss how we can help with your legal situation.
We provide our services at a competitive fee and can organise a meeting within a short time frame.