Key Advantages to setting up a Trust in New Zealand
Trusts offer several benefits, particularly in terms of asset protection, tax planning, and estate management.
If you’re thinking of starting a trust, get in touch and we’ll work with you to evaluate whether a trust is the right option for you.
Key Advantages of setting up a Trust in New Zealand
Here’s a list of the main advantages of setting up a trust:
Asset Protection
- Shielding Assets: Trusts can protect assets from creditors or potential legal claims, especially in cases of bankruptcy or litigation.
- Separate Ownership: Assets placed in a trust are no longer owned by the individual, making it harder for creditors to claim them.
Estate Planning and Management
- Succession Planning: Trusts allow for the smooth transfer of assets to beneficiaries, helping to avoid probate and ensuring that your wishes are carried out.
- Control Over Distribution: You can specify how and when beneficiaries receive their inheritance, which is particularly useful if you have minor children or beneficiaries who may struggle with money management.
Tax Advantages
- Income Distribution: Income generated by trust assets can be distributed to beneficiaries, which can be advantageous from a tax perspective.
- Minimising Estate Duty: Although New Zealand currently does not have estate duty, setting up a trust can provide future tax benefits if tax laws change.
Family and Wealth Protection
- Protection from Relationship Property Claims: Trusts can be used to protect family assets from relationship property claims in the event of a divorce or separation.
Protecting Vulnerable Beneficiaries
- Trusts can ensure that vulnerable family members, such as those with disabilities, are taken care of according to your wishes.
Business Continuity
- Smooth Transition: For business owners, a trust can help ensure the continuity of the business by managing the transfer of business assets to the next generation or other chosen beneficiaries.
Flexibility
- Tailored Solutions: Trusts can be tailored to meet specific needs, such as charitable purposes, special family circumstances, or complex asset management.
Intergenerational Wealth Transfer
- Long-Term Wealth Management: Trusts can be used to manage and protect family wealth across multiple generations, ensuring that assets are preserved and grown for future beneficiaries.
Is setting up a trust the right option for you?
Overall, starting a trust in New Zealand can be a strategic tool for managing and protecting your assets, providing both peace of mind and financial benefits for you and your beneficiaries.
However, there are other business structures available to you so it’s important to seek expert advice to ensure that a trust is the right solution for your specific situation.
If you’d like further professional advice on any of the above matters, please contact us.