What do Trusts mean to a Property Investor?
Trusts offer solutions for many situations but it does not necessarily mean that it is a solution for all problems. The working of a trust must be fully understood before it is created. It is very important that you get advice from an expert in the field of trusts and that you do not allow anyone (including me) to influence your decision-making. Also bear in mind that the rules / legislation can change and the discussion in these essays are purely of a general nature.
So let’s get down to it:
- An Inter Vivos discretionary Trust must be formed
- Trust must be drawn up in such a manner that the Trustees are also beneficiaries and have the right to appoint anyone else or any other Trust as a beneficiary.
- This will enable funds to be “distributed” between Trusts and from and to Trustees with tax benefits (under current legislation)
- It is always a good idea to have two Trusts; one for trading in (where the risk lies) and one for “hoarding” assets which have been paid up. You will then have peace of mind that your worldly goods are safe should anything happen.
- There is also a tax benefit here should you join the world of ghosts, goblins or eternal life (depending on how you’ve lived of course) as you will not have assets in your estate. These assets will be safely in your Trust and no estate duty will be applicable
- To make all the above legal, an independent Trustee must be appointed. This Trustee will not have a vested interest in the Trust or be required to provide any sort of suretyship.
So, now we have come to the end of a bit of information regarding Trusts and I hope it helped somewhat and that the mud has cleared from the water a bit.
Look after yourselves and I “Trust” you have a wonderful day.
