“Someone is sitting in the shade today, because someone planted a tree a long time ago.”
– Warren Buffet –
There are a variety of different Trusts available that can be utilised for a variety of different reasons, they do however have the common characteristic that they are established and operated for the ultimate benefit of their beneficiaries. Other features prominent in Trusts are;
- Asset Protection
- Ability to nominate recipients of income
- Tax Efficiencies
The Team at Odyssey Financial Advice have over a decade of experience in the management of Trusts and the formulation of appropriate Trust investment portfolios. Where a Trust structure is appropriate for your needs, we will work with your Accountant and/or Solicitor to ensure that the Trust, and it’s management meets your needs.
We are regularly contacted by Trustees who are experiencing difficulty in the creation of an investment portfolio for an existing Trust. Balancing the protection and income needs of the beneficiaries against a suitable amount of risk exposure for the Trust is an area where Trustees should seek Professional Advice. We can work with you to ascertain the objectives of the Trust, make sure they adhere to the Trust Deed requirements, and formulate a risk strategy that matches the needs of the Beneficiaries.
Trustee: It is the Trustee’s responsibility to manage the Trust abiding by the rules set out in the Trust Deed, for the ultimate benefit of the Trust’s Beneficiaries.
Trust: The Trust is the structure that holds the investments.
Beneficiaries: The Beneficiaries of the Trust are the recipients of the Trust’s income, they may receive a proportional amount of the benefit, or a set amount depending on the type of the Trust and whether the Trustee has discretion.
Different Types of Trusts
As each Trust is governed by it’s individual Trust Deed, the structure and the type of Trusts can also vary. Below are some examples of Trusts that we assist;
Family Trust
A Family Trust is a discretionary trust established with the intention of holding a family’s assets or a family’s business interests.
The benefits of a Family Trust can include;
- Tax Efficiency – Having discretion as to what proportion a family member receives from the Trusts income can assist in creating tax efficiency within your family. Trusts also carry a different capital gains tax rate which may be more beneficial than your individual marginal tax rate.
- Asset Protection – Offering a completely separate legal entity, Trusts can provide protection from personal litigation whilst your family benefits from the use of the asset.
- Intergenerational Wealth Transfer – Offering the ability to transfer the benefit of family assets across multiple generations of family members whilst insulating the assets from external parties.
- Business Operation – It is possible to operate a business through a Family Trust which can provide protection to related parties, as well as greater options for Business Succession and income distribution.
Unit Trusts
Divides the beneficial ownership of the trust assets into units. Unlike a discretionary trust, the trustee has no discretion as to how much income and capital is distributed among beneficiaries (unit holders). All Distributions are a proportional reflection of that unit holders overall percentage of holdings.
Special Disability Trusts
Carers of loved ones with disabilities undoubtedly devote a considerable amount of their time and effort ensuring those under their care receive the very best support and care they can. But what happens if they are no longer capable of looking after those under their care?
A Special Disability Trust is a legal structure that can assist in meeting the ongoing financial commitments associated with the care of an individual whilst also providing for flexibility and lifestyle benefits for their carers.
At Odyssey we have years of experience assisting carers to prepare their financials in an appropriate way to continue to provide for the welfare of those under their care. We will work with your family, as well as Centrelink and industry professions to ensure that your Special Disability Trust is complimentary to your family’s circumstances.
Benefits of Special Disability Trusts can include;
- Tax Advantages
- Social Security Benefits
- Ongoing Payments for Accommodation and Reasonable Care Needs
- A plan for how those under your care will be looked after in the future
