Basics and Benefits of a Family Trust


Tax Efficiency:

A family trust can offer tax benefits by distributing income amongst family members in a strategic manner. This flexibility allows for potential tax savings. It enables income splitting, which can lead to lower overall tax liability.

Asset Protection:

In the event of divorce or bankruptcy, a family trust can shield assets from being directly accessible by creditors or ex-spouses. A fully discretionary trust (with no default beneficiaries) allows the trustee to control asset distribution, preventing beneficiaries and creditors from claiming a share.

Succession Planning:

A family trust facilitates smooth wealth transfer across generations. By specifying beneficiaries and appointing trustees, you can ensure that assets are managed and distributed according to your wishes.

Future Centrelink Planning:

By gifting personal assets into the vehicle of a Family Trust, (and as long as you are not listed as a Trustee, Appointor or Beneficiary), these assets are quarantined from the Centrelink Means Testing after a period of 5 years has elapsed from the date of the gift, known as the expiration of the deprivation period. This could result in far more favourable future Age Pension benefits.