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Family TrustsFor income allocation and asset protection
Family trusts are more prevalent in the UK, Canada, Australia, New Zealand etc. They generally follow the basic trust concepts of settlor[s]... settling property on the Trust... which is managed by the Trustee[s]... for the benefit of the Beneficiaries. In some cases, the taxpayer can be settlor, trustee and beneficiary. In each jurisdiction, the actual rules and operation are influenced by income, gift and estate / inheritance taxation and by the rules under which assets such as property and shares are owned. In the UK, for example, taxation is the same in England and Scotland, but land ownership rules are different. A key point is that it is the Trustee who has discretion to allocate income amongst the beneficiaries. So, income is generally sprinkled amongst beneficiaries such as spouse and children who have lower rates of taxation.
Rather than detail each jurisdiction, here are some convenient links to sources of information in each jurisdiction. Our intent is to describe estate planning scenarios and solutions. We do not provide advice - for advice you should consult professionals such as attorneys and accountants.
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