Sherwood, age 89.. I was born in New Zealand but worked outside of New Zealand most of my life and do not know very much

Hi
I am a New Zealand lawyer based in Wellington and will help you with your question today. Please give me a minute to read the question

It isnt difficult to set up a trust in New Zealand.

The pros of having a family trust

The main advantages of having a family trust is to protect assets for beneficiaries from their creditors, relationship property claims, or if you believe they are unable to manage their financial affairs. They also serve to minimise or prevent claims against your estate. You can be a trustee and a beneficiary of your trust, so a trust may be useful to protect the family home from a risky business venture for example. Trusts can also be used to protect money set aside for special purposes.

At your death, the Courts can overturn or rewrite provisions in your will if they consider family members have been disadvantaged, but they cannot do this to a trust. Essentially, this ensures your estate continues to benefit your named beneficiaries regardless of their individual situations.

The cons of having a family trust

The most significant disadvantage of having a trust is that you lose ownership of the assets you gift to the trust. Even though you can appoint trustees and act as a trustee, the assets have to be used in accordance with the trust deed. If you continue to treat the assets as your own, the trust can be challenged as a sham.

Next there are establishment, accounting and administrative costs to consider. As a legal entity, the trust will have to file an annual tax return if it generates income. The cost of establishing a trust depends on its complexity and the assets it holds. You’ll need to weigh up the benefits of having a trust against the ongoing costs.

The first step would be to find someone to be the trustees, and then instruct a lawyer to draft the deed. Once this has been signed, then the trust is operational