A Trust is a legal arrangement whereby assets are held in the trust, and administered by ‘trustees’ for the benefit of ‘beneficiaries’.  Legal ownership of assets is held in the names of the trustees, as Trusts are not considered to be “entities” in the legal sense.

Common uses and benefits of a Trust include:

• Protecting assets against claims from creditors, relationship breakdowns or from other family members
• Safeguarding property for minors, spouses or sick/handicapped dependants
• Offering the ability to withhold assets from irresponsible children or grandchildren until they are older and more mature

The Property Relationships Act 1976 has extended the property rights of married couples to de facto couples, thereby expanding the pool of possible claimants.  Where a de facto relationship breaks up, your partner can claim 50% of relationship property. Similarly, if your child inherits, their inheritance can become relationship property in their relationship and thus subject to claims by their partner in the event of a marriage or de facto partnership break-up. Trusts can be a useful tool to protect your assets and estate in this situation.

Trusts are not suitable for everyone, however, and there are ongoing costs and obligations in order to ensure that trusts remain legally recognised.  It is best to speak to a specialist for advice suited to your particular needs.