Some people will criticise you and question you as to why you should set up a family trust. They will tell you it is selfish and not fair to others who have less than you. Or you will be accused of misusing our tax system and acting like a tax evader.
Reality though, is that our legal system has been set up by our lawmakers, and endorsed by our major political parties, as a valid and well-functioning legal system, which ensures that all taxpayers are treated equally in their individual assessment. It is not easy to administer, and our lawmakers have taken great pains to realise our present system.
It is therefore up to us as taxpayers to see how we fit into that system as individuals, business, charities and trusts. Each entity has its own requirements and often we have to ask an accountant for assistance to find out what taxation fulfilment is required for us in our personal assessment.
Many factors are at play and with regard to trusts the Trustees have the added responsibilities to ensure that not too much tax is paid, and that the assets are effectively protected and that the Trust’s income is safely taxed and held as well. The beneficiaries of the Family Trust are entitled to that protection.
A Trustee who is acting as a prudent trustee will ensure that all the boxes are ticked, and that he or she is acting in the best interest of the Beneficiaries of that family Trust at all times.
A lot is at stake.
Setting up and running a Family Trust goes far beyond a person’s individual gains or losses, it must always also incorporate the long term needs of the other Beneficiaries of that Trust, usually the children, as well.
That is sufficient justification to run a Family Trust as a prudent Trustee, I believe.