Insurance is a necessary investment in many cases throughout our lives. If offers protection, at a relatively small cost, for unexpected and significant losses that may occur in your life. Most individuals will protect against unforeseeable and unpreventable losses such natural disasters, accident and medical emergencies.
However, it is also important to ensure against everyday risks such as income protection, health insurance, motor vehicle insurance and travel insurance. Quite often in life an unexpected turn of events may lead to a significant insurance pay out. It is advisable and good business acumen to seek sometimes, if you do not have liquidity or capital needs immediately, it is wise to invest the money or save it for future use. Establishing a trust from your insurance proceeds is a course of action which may be hugely beneficial. Thorough and detailed advice from a qualified and experienced Asset Protection and Trusts Lawyer can be greatly in structuring and drafting such a trust deed.
Of course, many of us are aware of the major benefits of using a trust structure to manage capital and income. These benefits include to minimise tax, to access a high level of flexibility investment and distribution and to protect against external risks such bankruptcy risks. If you use a discretionary trust structure then no beneficiary has a fixed entitlement to the trust assets and you have the power to determine the individuals or organisations are beneficially entitlement to income of the trust. Thorough and detailed legal advice in the complex area of trusts law may be of great value in determining the appropriate trust structure that is suitable for your needs.
There are many different types of trusts with unique features and advantages. You may prefer the flexibility and tax advantages of a discretionary trust or require the fixed interest and entitlement from a unit trust or wish to operate your own family business through a trading trust. The trust provides a unique legal relationship between a trustee, beneficiary and involves ‘trust property’. There are protections for the beneficiary as although the trustee has legal title, the beneficiary has an equitable title. The trustee has an obligation to act in good faith and comply with fiduciary duties. The obligations of a trustee are equitable and are enforceable only in a court having equitable jurisdiction. Even though the trustee’s obligations are personal obligations they are also annexed to the trust property, so that the beneficiary has rights of a proprietary nature constituting an equitable estate in the property, which rights are enforceable against any subsequent holders of the property other than a purchaser for value of the legal interest without notice (or an innocent third party that later acquires the trust property with no knowledge of the equitable interest by trust).
A trust is a vehicle or device that may be very useful for wealth generation, investment, tax minimisation and distribution of income and capital. A qualified Asset Protection and Trusts Lawyer may have regard to you circumstances and advise you of the suitable trust structure that is compatible with your needs.