Gifting assets to your Family Trust not only protects your assets but is great for tax planning. Many of us establish a family trust for asset protection. Having now established your trust, many ask us how do I get money into the Trust .

Fundamentals of a family trust

The Trust has a couple of fundamental elements that your should be aware of, but in simple terms these being:

  1. Trust Deed – the rule book
  2. Settlor – establishes the family trust.
  3. Trustee – runs the Trust.
  4. Appointor – appoints the Trustee.
  5. Beneficiary – family who benefit from the Trust.

How do I get money into my family trust ?

Putting money into your trust can be done in two ways:

1.Gifting assets from your funds to the trust.

2. A Loan from you to trust – repayable defined or non defined

Either method works but gifting assets to your Trust is better for estate planning.

Loaning money to your Trust!

A loan to your Trust from you allows you to request that you can recall the monies depending upon the trust the ability to pay and several other factors. Even though a loan agreement is not necessary, many people still decide to draw up such an agreement for certainty and estate planning. The Trustee has an obligation to repay the loan if requested. If no loan agreement, then maybe at a minimum the loan should be recorded by the Trustee at a minute and recorded in the Trusts balance sheet.

Gift assets to the Trust

A Trust can help protect you and your family’s assets. Many families gift assets to the Trust. This means that you forego ownership and the asset forms part of the Trusts capital or corpus. This means that overtime creditors, angry family members and newly wedded children cannot make a claim on these assets as they are now owned by the Trust.

In most family trusts, the control is established by yourself as the appointor. The appointor has the ability to fire and hire the Trustee. This means that you effectively control the Trust.

Upon your death, your executor acts on your behalf and the Trust continues to the next generation detailed in the Trust Deed until trust vesting day normally 80 years after establishment.

As the Assets are owned by the Trust, gifting can in some circumstances for social security planning.

Every person’s circumstances are different, so the above is a very simplified summary of the operation of the trust and your money. We suggest that you seek professional advice, and we are happy to assist you if you need help in this area.

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