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|Posted: Tue 10:11, 05 Nov 2013 Post subject: barbour italia Types Of Trusts
Due to an increase in personal and business lawsuits, Tax Effective Accountants explain the different Types of Trusts available and how you can protect your Assets and financial security.
Trusts and Asset Protection can be established for a variety of reasons from protecting your business from creditors and family assets from lawsuits, to creating a legacy and providing financial support to a charity of your choice. They also offer significant tax effective benefits.
An effective asset protection plan allows you to:
Manage your assets more effectively during your lifetime
Protect your financial interests as well as that of your spouse, children, siblings and other beneficiaries from unforseen risks and liabilities
Significantly reduce taxes by strategically planning the distribution of income, capital gains and assets to your beneficiaries
Create a legacy when youre no longer around and ensure your assets are passed on from one generation to the next without paying taxes and duties
One of the most effective vehicles to use for asset protection is a trust. Trusts come in many shapes and sizes. And there is no one size fits all. The type of trust depends on many factors. The most common type of trust [url=http://www.burnabystorage.com/barbour.php]barbour italia[/url] is a family trust.
So, what is a trust?
A trust is simply an agreement whereby a person or company agrees to hold an asset for the benefit of the others. The person who controls the asset is known as the trustee and those who benefit are called the beneficiaries.
The assets held in a trust can vary from property, shares, a business and business premise to works or art and so on.
You, the creator of the trust sets out the specific terms as to how you want these assets managed in a document called the trust deed.
By transferring or buying assets in a trust, you dont own the assets [url=http://www.wiis.fr]louboutin pas cher[/url] in your name. The assets are legally controlled by the trustee. However, you control exactly how theyre managed now and in the future. So regardless of what [url=http://www.davidhabchy.com]barbour outlet[/url] happens in life, your assets are protected from loss.
Types of trusts
Enhancing your long term financial security requires careful planning and the type of trust appropriate to you will depend on a range of different factors.
The 3 most common types [url=http://www.wiis.fr]louboutin[/url] of trusts are:
Discretionary Family Trusts
Discretionary family trusts
A Family Trust (also known as [url=http://www.mxitcms.com/abercrombie/]abercrombie milano[/url] a discretionary trust) is the most common trust used by small to medium size business owners, investors and medical professionals in Australia. They are generally set up to hold a familys assets and/or business for the benefit of providing asset protection and tax planning for family members.
From a tax perspective the main advantage is that any income generated by the trust from business activities and investments, including capital gains can be distributed to beneficiaries in low tax brackets to significantly reduce taxes. And the distribution is discretionary, which means, no beneficiary is entitle to receive income or capital, so in the example where one beneficiary was sued, the trustee can decide not to distribute income of capital to that beneficiary.
Assets can also be transferred from generation to generation tax and duty free.
In most cases, from an asset protection perspective, assets held in a family trust cannot be attacked by creditors or lawsuits.
Other [url=http://www.burnabystorage.com/barbour.php]barbour sito ufficiale[/url] types of discretionary trusts are [url=http://www.rtnagel.com/louboutin.php]louboutin[/url] testamentary trusts, child maintenance trusts, property trusts, special disability trusts and charitable trusts.
Unit [url=http://www.rtnagel.com/louboutin.php]louboutin pas cher[/url] trusts
A unit trust is like a company where the trusts property (business or investments) are divided into a number of shares called units. The number of units you hold will determine your entitlement to your share of income, capital gains and voting power.
Units in a unit trust can also be categorised. For example you can have income units and capital units. Also unit holders can be individuals, companies or discretionary trusts.
The taxation benefits are generally not as flexible as a discretionary trust in that any income distributions must be distributed to unit holders as per their share of units. However if a discretionary trust was a unit holder you can achieve the same flow through tax benefits.
From an asset protection point of view, unit trusts dont provide the same kind of asset protection as a discretionary trust. If a unit holder is made bankrupt, then that persons units will [url=http://www.ttcarpets.co.uk]mulberry outlet[/url] be treated like any other assets and sold to raise funds to pay creditors.
A hybrid trust takes the best features of a discretionary trust and the best features of a unit trust and puts them into one. This means that the trustee has the discretion to distribute benefits to the beneficiaries of the trust to beneficiaries who are on low tax rates, as well as have unit holders who are absolutely entitles to a portion of the benefits.
Trusts are a fantastic vehicle to hold and protect both personal and business assets. They can also be an excellent tax planning structure that can substantially reduce your tax. Due to [url=http://www.tagverts.com/barbour.php]www.tagverts.com/barbour.php[/url] the complex nature of setting up a Trust we advise talking to a Trust and Asset Protection specialist to discuss your personal situation.
Tax Effective Accountants
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We do it all tax returns, tax advice, trusts & asset protection, self managed super, financial advice, lending, property investments, financial education and more. Contact [email protected]
Tax Effective Accountants
Level 12, 25 Bligh Street, Sydney, NSW 2000
Tax Effective Accountants
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