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Is a family trust right for me?
accelerateonline • Jul 03, 2018
Family trusts are a popular way to protect and manage your assets, such as the family home, for you and your family, now and in the future. They can have a valuable role to play, but they’re not suitable for everyone. Here are the pros and cons of family trusts to help you decide if it’s worth investigating further.
Five good reasons to form a family trust
- Protect your assets against claims and creditors in the event of business failure or a lawsuit.
- Set aside money for special reasons, such as a child or grandchild’s education.
- Ensure your children, not their partners, keep their inheritances.
- Protect your children from squandering assets or falling prey to financial scams before they’ve gained sufficient life experience to make sound decisions.
- They have a life of up to 80 years (or 125 years under the new bill) unless it’s wound up and distributed earlier.
Three disadvantages of setting up a family trust
- Transferring your personal assets to a trust means you lose complete ownership and it will be the trustees’ responsibility to control them.
- The time and cost involved in setting up a trust and meeting its annual accounting and administrative requirements.
- Disgruntled beneficiaries have the power to sue trustees where trustees have acted in breach of trust. While it’s not common, it is happening more often.
What’s next?
Get professional advice from the start. We can answer any questions you have about trusts, being a trustee, administering a trust deed, and the proposed new Act. Contact us today to book an appointment to meet with us.
Accelerate - December 2023
Accelerate August 2023
Inland Revenue have recently announced this year’s livestock Herd Scheme Values and we think this is a great opportunity to update you on the latest movements. The Herd Scheme Values are the National Average Market Values, determined by a process involving a review of the livestock market as at 30 April.
The values for Dairy this year have seen a fall in values across all female classes, but increases across all male classes. The fall in R1 heifer values can be attributed to the prohibition of live export by sea commencing from 30 April 2023. For the first time the National Average Market Value for R1 Heifers is less than the National Standard Cost of breeding and rearing an R1 Heifer.
In contrast to Dairy values Beef values have increased on average 9% and are almost at record values for all classes.
Sheep values have all fallen from the high of 2022, slipping back an average of 10.2%. Whilst values have fallen, they are still either the second or third highest that they have ever been depending on which class of sheep you are looking at.
Goat values have increased on average 7.8% with almost all classes of fibre and meat producing goats at record highs. The value of milking goats continues to be well down from historic highs, except for breeding bucks which are at their highest value.
Like the rest of the world, New Zealand has reeled from the aftermath of Covid, rising inflation and interest rates, and the cost-of-living crisis. This year we also have a massive storm damage repair bill.
Any tax cuts, or changes to the tax thresholds were vetoed in Budget 2023 as this was viewed as worsening inflation.
Budget 2023 builds on the $889m already provided in response to this year’s storms. A further $6b is allocated for a National Resilience Plan , for rebuilding after weather events. $71b is committed to new and existing infrastructure projects: not only storm damaged communications, power and roading, but schools, hospitals, public housing, rail and road.
