Multi-generation Family Estates, Trusts & Equity

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Multi-generation Family Estates

The baby boomer generation is now the richest in Australian history, thanks to their ability to generate wealth. Their main concern is how to pass on their assets to the next generation without having them “lost” to people outside the family because of relationship breakdowns. Similar to this, blended families, a rising demographic in our community, have a particular need to guarantee that wealth gets distributed as planned.

If you belong to either of these two categories, you should know the Family Court’s “reach” and how it can affect your succession plans for your family’s business and assets. Therefore, family law issues must be discussed whenever asset protection, wealth transfer, or company succession planning.

Asset Protection

The following four issues impact asset protection and the transmission of wealth across generations:

● Structures used to protect or hold family wealth
● Personal relationships with people outside the family
● Wills & Estates
● Estranged family members

The most common structure your financial advisor or accountant will recommend is a family trust.

The family trust’s main reason is to hold assets and income split between family members to minimise the tax payable by those family members. A trust structure is instrumental in protecting assets against bankruptcy and creditors of beneficiaries, and it is the trust that owns the assets and not the beneficiaries. This legal principle prevents a creditor (or the trustee in bankruptcy) of a beneficiary from accessing the assets of the trust in payment of a beneficiary’s debts.

A Family trust consists of A trustee, an appointor (or principle), and beneficiaries, children from a family frequently named beneficiaries. As a result, it is possible to benefit the kids through trust distributions while excluding them from having any formal say in what or when they receive.

While a trust structure is beneficial for tax minimisation and asset protection, without specialist advice and careful structuring, a trust can generally not protect assets against an order of the Family Court. Contact Caruso & Co Legal lawyers today for any of your asset structuring and estate planning needs.

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