Family Trust; Its Characteristics

A Family Trust is characterized by the following:

  • It is generally established by a family member for the benefit of members of the “family group”
  • It can assist in protecting the family group’s assets from the liabilities of one or more of the other family members (e.g. in the event of a family member’s bankruptcy).
  • For instance. Bob Kennedy (a Kennedy family member and also a beneficiary of the Kennedy Trust) left campaign debts and expenses of more than $3,000,000 which his estate could not pay at his death. These debts could however not be deducted from any of the Kennedy Trusts;

  • It provides a mechanism to pass family assets to future generations; and
  • It can provide a means of accessing favourable taxation treatment by ensuring all family members use their income tax “tax-free thresholds”.
  • What Assets Can I Put Into A Family Trust?
    You can put any assets you wish into a Family Trust. Real property (i.e. a house or land) is a common choice of asset. If you decide to give your home to the Trust as an asset, you can arrange a “lease for life” with the Trustees, which allows you to continue to live therein for your lifetime. You can also move houses by authorizing the Trust to sell your property (if you so wish) and subsequently, purchasing another property of your choice.

    It is not advisable to put assets that will decrease in value overtime such as vehicles into the trust.

    Advice About Setting Up A Family Trust
    The Family Trust information here should be considered general in nature, and should not be interpreted as legal advice. With the right information and advice, the process of creating a FamilyTrust is simple, inexpensive and will give you peace of mind.

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