The Benefits of Trusts

Trust Planning - Jarrad Brown

Trusts are fiduciary agreements which allows a trustee (third party) to hold assets (cash, physical assets, investments) on behalf of a beneficiary or group of beneficiaries. There is a great deal of flexibility with exactly what can be achieved with a Trust and are typically used to control how and when assets will be passed onto beneficiaries.

Trust planning forms an integral part of the financial planning process and we can assess with you whether implementing a trust would be a worthwhile strategy for you.

There are many types of Trusts that can be set up for you but the main distinguishing factor is whether it is Revocable or not:

  1. Revocable: This particular Trust type can be dissolved at any time allowing you to have access to the assets within the trust at any time whilst you are still living. This type of trust is typically known as a Living Trust

  2. Irrevocable: This type of Trust will transfer the assets outside of your estate (and therefore avoid estate tax in most cases but this should be reviewed with your Adviser). An irrevocable Trust can not be altered nor can it be dissolved.

What are the Key Benefits of a Trust?

Setting up a Trust can be a critical part of your financial plan if your own personal situation warrants it. The following are the key benefits and drivers for setting up a trust.

  • Control of Your Wealth: The instructions within Trusts (i.e. the Trust Deed) can be very specific and you can control exactly who receives your wealth, in what matter and over what time frame. Even while you are still alive, you can set up a Trust and still retain access to those assets as long as the Trust is revocable (which is explained below).
  • Protection of Your Wealth: Trusts can be set up to ensure that those who are bankrupt or not sufficiently skilled to handle money do not receive any benefits. Trusts can also ensure that the creditors of your beneficiaries do not have access to the funds.
  • Privacy of Your Estate: The private nature of Trusts is important for those who do not want their assets and wishes on public record. The actions detailed within a Trust Deed remain private and in most cases, will allow the assets to pass to beneficiaries outside of probate.
  • Avoid Delays: Unfortunately, going through Probate can take a great deal of time and does not ensure the efficient distribution of assets to your beneficiaries. Trusts can generally distribute outside of Probate, which can save a great deal of time. This could be particularly important if your family will need access to your assets in a short time period.
  • Legacy of Your Family: Properly structured Trusts can ensure that your assets remain within your family rather than going to the family of your son or daughter-in law.

Arrange a No-Obligation Discussion

Trust planning is an important element of financial planning and should not be ignored. Click on the link below to schedule a no-obligation consultation to discuss how a trust may benefit your own personal financial situation.

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