Fri Oct. 3rd 2014
Many clients these days have a family trust. In the past it was part of estate planning when death duties still existed. These days there are no death duties payable however other considerations have come into play and trusts are formed for a variety of reasons including the possible:
- Protection of assets against creditors.
- Protection of assets against the operation of the Property (Relationships) Act 1976 whereby a partner/spouse acquires a 50% share in any property deemed to be relationship property after living with that person for three years or more.
- Protection against the user pays situation where a person may be hospitalized or in care for an elongated period.
Now with the repeal of the gift duty provisions a person or couple transferring assets into a trust will not be subject to the protracted gift duty regime. This means that where a client wishes to transfer assets to a trust, on establishing the value of that asset, it can be transferred outright providing that there are no insolvency or related issues. Previously clients may have formed the opinion that they had left it too long to create a family trust but now the considerations of a long gifting programme are not applicable. However, WINZ have stated that they will look at gifts of more than $27,000 in any one year in deciding whether a rest home subsidy will be available. It is yet to be seen whether clients will see this as an impediment. Probably in many cases the advantages will out weigh this consideration.
The contents of this article are for general information only and does not constitute legal advice and should not be substituted for professional legal advice obtained from your solicitor.