He says many trusts like that were set up by couples in long-term marriages, working in low-risk jobs, expecting their estate to be passed on to their children. <\/p>\n
\u201cAll of that can be achieved by putting a will in place,\u201d he says. Even if the couple did separate, \u201cthey would each clearly be entitled to half of that family home in any event\u201d. <\/p>\n
\u201cThere are quite a few out there where this situation is quite simple and can be addressed by other cheaper options.\u201d<\/p>\n
Stokes suggests the reason New Zealanders became so fond of trusts was more about keeping up appearances than efficiently managing assets. <\/p>\n
\u201cYou were seen as being successful if you had a trust… It was very much the thing that lawyers, accountants, everybody was recommending trusts, right, left and centre.\u201d <\/p>\n
AdvertisementAdvertise with NZME.<\/a><\/p>\n There have been a number of changes to the rules that govern how trusts must be managed, including a requirement to have an independent trustee and keep beneficiaries informed. The trust tax rate was also recently changed to align with the top tax rate of 39%. <\/p>\n \u201cIf you have a family trust and you\u2019re not clear on whether it\u2019s achieving anything… take the opportunity of actually asking yourself \u2013 why did I set it up? If you can recall what the reason was, is that still a valid reason now?\u201d Stokes says. <\/p>\n Otherwise, he says, it just adds cost and complexity without providing a benefit. <\/p>\n Even Stokes has rethought the need to have one. <\/p>\n \u201cThe same needs just weren\u2019t there anymore as what they had been previously, so we dealt with it, got it wound up, and that\u2019s a bit more spare time that I have up my sleeve instead of having to manage my own trust.\u201d <\/p>\n Winding down a trust can be trickier than setting one up, but either way, be prepared to keep a lot of records. <\/p>\n \u201cOne thing that does come with a trust, most definitely, is paperwork.\u201d<\/p>\n Listen to the full episode of The Prosperity Project<\/a> for more on the ins and outs of Trusts, and if they are right for you. <\/p>\n The podcast is hosted by Nadine Higgins, an experienced broadcaster and a financial adviser at Enable Me.<\/p>\n You can follow the podcast at iHeartRadio<\/a>, Apple Podcasts<\/a>, Spotify<\/a>, or wherever you get your podcasts. New episodes are released every Monday.<\/p>\n