Frequently Asked Questions

A family trust is a legal structure where trustees hold and manage assets for the benefit of family members (beneficiaries). The trust owns the assets, not you personally, providing protection from creditors, relationship property claims, and simplifying estate succession.

You likely need a family trust if you own your home (value $500k+), run a business, have professional liability exposure, want to protect assets from relationships, have blended family situations, or are planning for retirement and aged care. Book a free consultation for a personalized assessment.

Setting up a family trust costs $2,500-$5,000 depending on complexity. Annual administration costs $800-$1,500 for ongoing compliance, annual minutes, and record-keeping required under the Trusts Act 2019.

Yes. Transferring your home to a family trust protects it from business creditors, professional liability, and relationship property claims. Important considerations: 5-year aged care clawback, gifting program if mortgaged, and relationship property timing.

Key benefits: asset protection from creditors, relationship property protection, avoids probate delays and costs, tax planning opportunities, succession planning for children, protection from aged care means testing (after 5 years), and business liability separation.

Disadvantages: annual costs ($800-$1,500), ongoing compliance requirements, loss of first home buyer grants, potential mortgage difficulties, 5-year aged care clawback, cannot avoid existing creditors, and requires active administration.

The process typically takes 2-4 weeks from initial consultation to having your trust deed signed and assets transferred. Complex situations involving multiple properties or business interests may take 4-6 weeks.

Trustees should be trustworthy, financially responsible, and capable of managing trust affairs. Options include family members, professional trustees (lawyers/accountants), or a combination. We recommend at least 2-3 trustees with different perspectives for balanced decision-making.

Usually no. First home buyers lose access to: KiwiSaver HomeStart grants (up to $10,000), First Home Grants (up to $10,000), and potentially favorable first home buyer mortgage rates. For most young buyers with minimal equity and no liability exposure, these benefits outweigh trust advantages. Revisit trust planning in 5-10 years when mortgage is paid down, if starting a business, or accumulating significant equity.

The Trusts Act 2019 is New Zealand legislation that modernized trust law, replacing the Trustee Act 1956. It introduced mandatory trustee duties, enhanced beneficiary rights, stricter record-keeping, and clearer trust administration rules. All NZ trusts must comply.

Yes. While the Trusts Act 2019 introduced new compliance requirements, family trusts remain highly effective for asset protection, succession planning, and estate management. The Act modernized trust law but didn't reduce the benefits of properly structured trusts.

Mandatory trustee duties under the Trusts Act 2019: know the trust terms, act in accordance with trust deed, act honestly and in good faith, and act for the benefit of beneficiaries. These cannot be modified or excluded.

All trusts created before January 2021 should be reviewed for Trusts Act 2019 compliance. Key changes include mandatory trustee duties, enhanced beneficiary rights, and stricter record-keeping. A review ensures your trust operates effectively under current law.

Yes. Everyone over 18 should have a will. Without a will, the Administration Act 1969 determines asset distribution (which may not match your wishes), probate takes longer and costs more, courts appoint administrators, and family disputes are more likely.

A will takes effect after death and assets go through probate. A family trust operates during your lifetime, provides immediate asset protection, avoids probate, and offers flexibility. Most people need both - a trust for asset protection and a will for personal items.

Individual wills start from $450. Couples packages (mirror wills plus EPAs for both partners) cost from $850. Complex wills with testamentary trusts cost more. Professional will drafting ensures legal validity and reduces future disputes.

If you die intestate (without a will), the Administration Act 1969 determines asset distribution, your estate goes through lengthy court-administered probate, legal costs are higher, family disputes are more likely, and children under 20 receive inheritance at age 20 (not ideal).

While DIY wills are legally valid if properly executed, we don't recommend them. Estate planning involves complex legal, tax, and relationship property considerations. Mistakes can result in invalid wills, unintended consequences, or family disputes. Professional drafting ensures effectiveness.

Review your will every 3-5 years or after major life events: marriage, divorce, birth of children, significant asset changes, moving overseas, beneficiaries dying, or changes in tax/estate law. Marriage automatically revokes an existing will in NZ.

KiwiSaver doesn't pass through your will. It goes directly to your nominated beneficiaries (if you've nominated them) or to your estate if no nomination exists. Important: Check your KiwiSaver provider's website to ensure you have current nominations on file. Nominations override your will.

Relationship property is assets acquired during a relationship (3+ years together or with children). On separation or death, relationship property is divided 50/50 regardless of who earned the money. This includes the family home, chattels, income-earning assets, and KiwiSaver. Your will can be overridden by relationship property claims. Family trusts protect assets from relationship property division (after 2-year gifting period).

Yes. When you die, your surviving partner can choose between: (1) what your will gives them, OR (2) claiming 50% of relationship property under the Property (Relationships) Act 1976. They'll choose whichever is more favorable. This can significantly affect estate distribution. Consider contracting out agreements (prenups) if you want to control this.

Digital assets need specific planning. Include in your will: cryptocurrency wallet details and access instructions (stored separately), social media account wishes (memorialize or delete), cloud storage access, online photo libraries, digital business assets, and email accounts. Executors need legal authority and practical access. Consider a digital assets inventory stored securely with your will. NZ law on digital estate administration is still developing.

An Enduring Power of Attorney (EPA) appoints someone to make decisions for you if you become mentally incapable due to accident, illness, or dementia. There are two types: EPA (Property) for financial decisions and EPA (Personal Care & Welfare) for health/care decisions.

Yes, we strongly recommend both. EPA (Property) covers financial decisions like banking and property sales. EPA (Personal Care & Welfare) covers health, medical treatment, and living arrangements. They serve different purposes and both are essential for comprehensive protection.

Choose someone trustworthy, financially responsible, and capable of making difficult decisions. Common choices: spouse/partner, adult children, trusted family members, or professional trustees. You can appoint multiple attorneys to act jointly or separately, plus alternates.

No, EPAs don't need to be registered to be valid in New Zealand. However, they must be properly executed with witnesses and meet all legal requirements of the Protection of Personal and Property Rights Act 1988.

Asset protection is the process of legally safeguarding your wealth from creditors, lawsuits, relationship property claims, and other financial risks. Common strategies include family trusts, company structures, insurance, and relationship property agreements.

Yes, asset protection through family trusts and other legal structures is completely legal in NZ, provided it's done before creditor claims arise and follows proper legal processes. Fraudulent conveyancing (transferring assets to avoid existing creditors) is illegal.

Yes, when assets are transferred to a properly structured family trust, they're generally protected from business creditors, professional liability claims, and relationship property claims (if transferred before entering a relationship). The trust owns the assets, so creditors pursuing personal liability cannot reach them.

Assets transferred to a family trust within 5 years of applying for aged care residential subsidies may be included in means testing. Plan at least 5 years ahead if aged care asset protection is a goal. The sooner you establish a trust, the sooner the 5-year clock starts.

Trust administration is the ongoing management and compliance of your family trust. Under the Trusts Act 2019, trustees must hold annual meetings, keep proper records, make decisions, and provide information to beneficiaries. Professional administration costs $800-$1,500/year.

Poor trust administration can result in: loss of asset protection (courts may disregard the trust), IRD penalties, beneficiary disputes, challenges to trust validity, and potential personal liability for trustees. The Trusts Act 2019 requires active maintenance.

A gifting program is used when you transfer mortgaged property to a trust. You can't gift debt, so the property is sold to the trust, creating a debt. This debt is gradually forgiven (gifted) over time, typically $27,000 per year per person, with proper documentation.

Trustees should hold at least one formal meeting annually and record minutes of all decisions. Best practice is annual meetings to review trust affairs, discuss distributions, approve accounts, and document decisions. Minutes provide legal evidence of proper governance.

Costs vary by service: Family trust setup $2,500-$5,000, wills and EPAs from $850 per couple, trust reviews from $1,500, annual trust administration from $800. We provide transparent upfront quotes with no hidden fees.

Family trust setup includes: initial consultation, customized trust deed drafting, settlor and trustee documentation, asset transfer documentation, gifting program setup if needed, trust bank account guidance, and initial compliance advice.

Yes, annual administration costs $800-$1,500 depending on complexity. This covers: annual trust meetings and minutes, trustee resolutions, record-keeping, IRD filing support, compliance monitoring, and professional advisory support.

Assets must be in the trust before entering a relationship or de facto partnership. The Property (Relationships) Act has specific rules about trust property, and proper legal structure is essential. Transfers after entering a relationship may be challenged.

A relationship property agreement (also called contracting out agreement) allows couples to agree how their property will be divided if they separate, instead of following the Property (Relationships) Act default rules. Both parties need independent legal advice.

Yes, self-employed individuals and sole traders have unlimited personal liability for business debts. A family trust protects your personal assets (home, savings, investments) from business creditors. Consider combining with a limited company for trading operations.

Yes. You'll need a gifting program to gradually transfer the property to the trust. The property is initially 'sold' to the trust at market value, creating a debt to you. This debt is forgiven over time (typically $27,000/year per person) with proper documentation.

Yes, rental properties in a trust benefit from: protection from tenant claims, separation from personal assets, tax-efficient income distribution, simplified succession, and estate planning advantages. Consider bright-line test implications (10-year period for properties acquired after 27 March 2021).

International estate planning is complex. Each country has different succession laws, tax rules, and trust recognition. Generally: NZ wills cover NZ assets; foreign wills cover foreign assets. Some countries don't recognize trusts or tax them heavily. If you have international assets or beneficiaries, seek specialist cross-border estate planning advice. Issues include: domicile determination, forced heirship rules, double taxation, and probate in multiple jurisdictions.

Business succession planning involves: shareholder agreements (who can buy shares on death), insurance funding (life insurance to fund buyouts), training successors, valuation methodology, trust structures (separating business from personal assets), and clear transition timelines. Essential for partnerships and family businesses. Without planning, businesses often fail or must be sold urgently at undervalue when owner dies.

Blended families require careful planning. Options include: contracting out agreement (prenup) to quarantine separate property, family trust holding assets for biological children, life interest in property (partner lives in home, children inherit on partner's death), clear will provisions, and life insurance to equalize inheritances. Without planning, your surviving partner may claim 50% of everything under relationship property law, reducing inheritance for your children.

While DIY wills are legally valid if properly executed, we strongly recommend professional advice. NZ estate planning involves complex relationship property law, trust law, tax considerations, and creditor protection issues. DIY documents often miss crucial provisions, fail to achieve intended goals, or create unintended tax consequences. The cost of fixing mistakes later far exceeds professional drafting costs upfront.

Generally no for personal estate planning. Trust setup costs are capital expenditure, not deductible. However, annual trust administration costs MAY be deductible if the trust holds income-earning assets (rental properties, business assets). Consult your accountant. Don't let tax deductibility drive decisions - focus on asset protection value and estate planning goals.