Family Trust

A family trust is set up by a trust deed for the benefit of all the beneficiaries. The beneficiaries are usually members of the one family.

What are the advantages and disadvantages of a family trust? 

The advantages of having a family trust include: 

• The trust makes provision for the whole family; 
• It provides children with the benefits of family wealth without losing control over key assets; 
• Creates a legal framework for the family assets which will last for a long time; 
• The trust protects assets against actual and potential creditors; 
• Creates a tax effective structure; 
• Avoids any problems with probate; and 
• Helps with estate planning by easy intergenerational transfer of assets.

The main disadvantages of a family trust include: 

• The costs involved, such as the cost of setting up the trust and the ongoing fees; and 
• Loss of flexibility – all transactions are governed by the trust deed. 

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