There are numerous benefits to holding your property in a trust, such as lower tax rates and asset protection. Trust law has undergone recent changes in New Zealand, including increased disclosure requirements to named beneficiaries. Accordingly, this may impact whether you want to maintain your trust or dissolve it. This article aims to help with that decision and will explain:<\/p>\n\n\n\n
The settlor is the party that makes the initial property transfer to the trust. Therefore, anyone who transfers the initial asset(s) to the trust is known as a settlor.<\/p>\n\n\n\n
The trustees manage the trust’s assets, with the settlor identifying the initial trustees. The settlor can also be a trustee. The trustees have certain fiduciary responsibilities that they must abide by, and they must act for the benefit of the trustees. If you are also the settlor, it is often a good idea to appoint an independent trustee to ensure objective decision-making regarding trust matters.<\/p>\n\n\n\n
Beneficiaries are the persons who will benefit from the trust. All actions taken by the trustees are for the benefit of the beneficiaries. There are generally two types of beneficiaries: discretionary beneficiaries and final beneficiaries. Discretionary beneficiaries do not have an automatic right to payments from the trust. In contrast, final beneficiaries generally have a legal right to trust property when the trust ends.<\/p>\n\n\n\n
The main reason why you would want to dissolve a trust is that it does not fulfil its original purpose. This could be because that purpose does not exist anymore or you have achieved it.<\/p>\n<\/div>\n\n\n\n
For example, a family trust<\/a> set up to protect the family business may not be needed if the business is doing well. Additionally, if the trust is not set up correctly, it can be costly to maintain, and the administrative costs of doing so may outweigh the benefits that the trust brings. The existence of the trust may affect your eligibility for legal subsidies, or the tax benefits of the trust may be less lucrative than they were in the past. Or the simplest reason, the trust has reached its final distribution date, when you must distribute all assets in the trust to the beneficiaries.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n