Trusts allow for a separate structure to hold and control assets.
As the trustee is the legal owner of the assets, the trust provides a level of protection against personal liability if structured appropriately and may also allow you to arrange your finances in a tax efficient manner.
Trusts may also be used to allocate money for the sole purpose of caring for a family member who has special needs, or is a minor or is unable to manage money themselves.
What types of trusts can be established?
One of the most common types of trusts, these are also called “discretionary” trusts. They can be established during your lifetime to protect assets.
There are different types of charitable trusts and which is most appropriate for you will depend on whether you wish to be part of the granting process now, whether you wish to have full control over the investment of assets within the trust or whether you wish to provide a lasting legacy in your will.
If a beneficiary receives compensation following injury, a compensation trust can be established to manage and protect those assets to ensure they are maintained for as long as the beneficiary requires.
Special disability trusts
As the recipient of a special disability trust can only qualify if they have a severe disability, assets held in the trust up to a legislated threshold are exempt from the assets test for Centrelink purposes. Whether established during someone’s lifetime or as a legacy after they pass away, special disability trusts can have a significant impact on a vulnerable beneficiary who might otherwise have lost social security entitlements.
Protection of assets held for minors is often a priority for parents when considering what might happen if they were to pass away. A minors trust allows for payments to be made for the benefit of a minor until a specified age for education, health and wellbeing.
Superannuation proceeds trusts
A vital part of an effective estate plan, a superannuation proceeds trust allows for a superannuation death benefit to keep benefiting a beneficiary in the long term, minimise tax payable and provide a level of protection for assets held.
Call Invest4Life on (07) 5456 1355 to discuss your estate planning needs with our Financial Advisers.
Disclaimer: This information has been produced by Australian Unity Personal Financial Services Ltd (‘AUPFS’) ABN 26 098 725 145, of 114 Albert Road, South Melbourne, VIC 3205, AFSL & Australian Credit Licence 234459. Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making investment decisions. AUPFS is a registered tax (financial) adviser and any reference to tax advice contained in this document is incidental to the general financial advice it may contain. You should seek specialist advice from a tax professional to confirm the impact of this advice on your overall tax position. Nothing in this document represents an offer or solicitation in relation to securities or investments in any jurisdiction. Where a particular financial product is mentioned, you should consider the Product Disclosure Statement before making any decisions in relation to the product and we make no guarantees regarding future performance or in relation to any particular outcome. Whilst every care has been taken in the preparation of this information, it may not remain current after the date of publication and AUPFS and its related bodies corporate make no representation as to its accuracy or completeness. Published: February 2017 © Copyright 2017