Family Trusts

FAMILY TRUSTS
Income Allocation & 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.

Our intent is to describe estate planning scenarios and solutions. We do not provide legal or tax advice. For advice on trusts, you should consult your attorney and accountant.