If you’re thinking about setting up, or reviewing an existing family trust, then you have come to the right place
It is like an insurance policy. Among other benefits, they are designed to protect you from an adverse event, if and when one happens.
It’s obvious that we don’t know what those ‘events’ could be for you. We hope they never occur…They may never happen and if they do, the effects may only be minor. On the other hand, one could be so devastating to you, your family and your life, that it could have a permanent effect on you, your assets, your cash flow, your happiness, and the people you love.
Please understand, it’s not our intention to scare anyone. But as pragmatic professionals who deal with trusts for New Zealanders’ financial affairs and assets on a daily basis, we get to see the extreme and often horrendous results that come with NOT BEING PREPARED. Besides, if one of these events does happen to you, the last thing you’d want to do is worry about whether your financial future was protected – right?
Some accountants may find family trusts terrifically fascinating, but for the majority of New Zealanders they are not really that exciting.
But are they important?
Owning a business, owning some property, planning your estate for future generations, or owning investments and NOT seeking professional trust advice is a bit like jumping out of an airplane before checking to see if the parachute is strapped on…it’s crazy.
One of the most common private and business ownership structures in New Zealand, is a discretionary trust. Their advantages are broad and flow across asset protection, estate planning and taxation benefits. GRA have a division dedicated to forming and managing trusts. We utilise internal resources and, where necessary, external law firms to set up and support our clients as required in this area.
Typical structures GRA create will see:
It frustrates the heck out of us. Why are people happy to plan for success but not for failure? It’s true if you think about it. We set goals to start or change careers, buy property, or start new businesses. Some people create meticulously detailed plans which they can implement that will (hopefully) lead to their success.
We also spend huge sums of money and hundreds of hours on books, education, training, seminars, and mentors to help us feel successful. And all the while, measures to safeguard ourselves in case of failure hardly get a mention.
Why is that? We’re unsure. Part of it is probably plain ignorance and the other part is just human nature, we guess. The thing is, even though people know about the value of protecting their assets, some still choose to do nothing. Until it’s too late…
Properly setting up and managing a trust, is like your own personal plan B. The only difference is that the cost of planning for failure is way lower than the cost of planning to succeed…or the cost of doing nothing.
Taking the first step to protecting yourself and your future is all it takes. Waiting until the liquidator is appointed, or until after the death of your spouse (or whatever), is never the right time to seek advice.
Thanks to the internet, if you have the time, you can find out almost anything to do with anything when it comes to trusts in New Zealand. The amount of information available (including misinformation) is staggering…and potentially dangerous.
In fact, it’s one of the reasons we offer a Family Trust Rescue Service to help people fix their ‘sham’ trusts and regain the protection they initially thought they had. But that’s another story. Have a quick look at this short video.
At the heart of it all, we are chartered accountants. We’ve been doing it successfully since 1992. From individuals to large organisations, we provide a full range of professional services.
We know what you’re thinking… “Who cares? Every other chartered accountant says the same thing!”
But read on to discover the two reasons why we truly are different and why we deliver the very best, cost-effective VALUE to anyone seeking asset protection in New Zealand.
Our final message is simple. Family trusts that we’ve set up and currently manage have solved big problems for our clients…but we’re NOT passionate about trusts! We’re passionate about how our work has helped thousands of Kiwis sleep better at night.
When setting up a trust, you have the option of having an independent trustee as a trustee. This is a person or entity that is not a beneficiary in the trust that votes on trust decisions and gives guidance on activities of the trust.
While it is not necessary to have an independent trustee to have a valid trust we strongly recommend you do have an independent trustee. If you're going to put an independent trustee into your Trust, you might consider using the GRA Professional Trustee. We are the winners of the inaugural Corporate Trustee of New Zealand Award. This means we have been judged by our peers to be a market leader in the Trust arena.
Utilising professional independent trustees in your trust is something that GRA recommends as best practice. In short, the law is moving towards supporting the position that the inclusion of an independent professional trustee makes your trust extremely robust and difficult for a creditor or a spouse to attack as a sham.
Recent (2008 and 2009 cases) in the High Court and Court of Appeal (which we are happy to supply on request, including Wilson v OA and other cases) show judicial flavour supports the position that having a lawyer or accountant in your trust as your independent trustee, voting on decisions and minuting meetings, makes your trust very strong.
When choosing your professional trustee, ensure they are of sound character and sufficient maturity and that they can take the task on properly, weighing up the various points Trustees need to consider when discharging their duties, ensuring at all times the Trust cannot be vied as a sham.
Don't be nervous in the belief that if you appoint the GRA Professional Trustee you will lose control of your assets. Typically, you hold the power of appointment (the power to fire such an independent trustee), so you can change the trustee should you choose to. And on death, you can will the power of appointment to your final beneficiaries jointly (or individually), giving them full control over your trust.
Our Trustee Services Division and our professional trustee is run by Janet Xuccoa, one of our Partners at GRA. Her division is dedicated to ensuring what you put in your Trust stays protected, for you and your loved ones. At the time of writing, our professional trustee is involved in over 2000 trusts in New Zealand. Our Trustee Services division routinely provides support daily to trust clients. In particular it assists Trust clients to:
With the benefit of the security of a professional trustee comes the cost of its professional services. Typically we charge a fixed fee annually for our membership of $475+ GST every January, and on top of this on a time and cost basis at a rate of $350+ GST for other work.
Buying a new property, for example, might cost $300-400+GST. In return, you get strong record keeping, governance, and your trust is safe
Click below to request more information about our Professional Trustee Service.
Click below to request an interview on setting up family trusts.
|Matthew Gilligan CA CPP
Asset Planning Director Gilligan Rowe + Associates
Learn more about Matthew
Accounting Services Division.
Gilligan Rowe + Associates
Learn more about John
|Janet Xuccoa BCom LLB
Trust Services Gilligan Rowe + Associates
Learn more about Janet