We constantly get asked about trusts. It's been a bit of a buzzword recently, and many people believe everyone should have a trust.
So, should you? We think a trust is a bit like having an insurance policy, you never know if you'll need one until the occasion arises and you wish you did.
WebsterLaw can assess the risks you face in your life, quantify them as best we can, and decide if putting your major assets into a trust is a good idea. Once we have a handle on your situation and decide that a trust is needed, we tailor one accordingly. It may be a simple trust to hold a family home, where business risks pose a threat to the assets. It may be a reconstituted family where the partners want to isolate assets for the benefit of their first families. There are also trading trusts to own businesses.
We're often asked about shifting assets into a trust to enable access to rest-home subsidies. Where this is the only reason to have a trust, we advise people to think again. The risks are really very minor. 2003 statistics showed that only 1.8% of those aged 65-75 were in a rest home. For the 75-85 age group, the figure was 5%. And even for those over 85, only 27% were in a rest home. This means that 73% were not. WINZ have made it harder and harder over the years to grant benefits like rest home subsidies, where the parties have a family trust that holds all their assets. We work with clients to make applications for these subsidies where they have a trust to clearly set out why the benefit should still be made available, where possible. We also assist clients in applying to WINZ for a loan to pay rest home care costs when they are eligible.
To establish whether or not you need a trust, we'll discuss your situation and gauge the best set-up for you.
The new Trust Act came into force in January 2021. This places new obligations on trustees. We are finding that clients are taking this as an opportunity to review their need for a trust and the ongoing annual costs that are involved. If we find that a trust is no longer relevant, we advise on the closing down of the trust.