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And the key to unlocking this puzzle hinges on one simple word – family.
As the title suggests, a family trust is a trust set up to benefit family members and is achieved by separating asset risk from the asset owner.
The goal is to transfer your significant assets from personal ownership to ownership by the trust – in other words, to achieve "personal poverty" while becoming a beneficiary of the trust yourself.
By doing this, you may succeed in protecting your assets from threats, such as claims by business creditors, or claims by ex-spouses or partners under the Property (Relationships) Act. Leaving family as the ultimate winner, where you and future generations can enjoy the accrued benefits of these hard earned assets.
As well as protecting family assets from the settlor (or family creditor) a trust can protect family assets against claims; protect special assets; provide a protection for (and from) vulnerable beneficiaries; and provide flexibility in providing for the different needs of different beneficiaries in a fair way.
It is important to note each family’s circumstances are different and must be accounted for as to how a trust is to be established or maintained.
A professional examination of a family’s circumstances to help demonstrate if there is a need for/or a preference for a trust is highly recommended.