Types of Trust
'Trust' is an umbrella term and each different type of trust listed below comes with their own specific procedures and regulations.
The term may cover:
Child Trust Fund (assets given to a child)
Charitable Trust Fund (money given to one or a number of charities)
Family Trust Fund (assets which are looked after and then given to family members)
Investments Trusts (a type of investment fund which invests in hope of capital growth and / or income)
The way in which these trusts are set up will also alter their functions. A trust may either be set up during one's lifetime (inter vivos or living trust) or after someones death as requested in a will (will trust or testamentary trust). Again, these trusts can be personalised as to whether they are irrevocable, revocable or discretionary.
Trusts are a very complicated area of taxation and trustees are responsible for completing tax forms correctly according to their type of trust. The trust's deeds must be written up into a legally binding document and there are many specific rules and regulations regarding tax on the money set aside into a trust. In many cases you will need to seek legal advice and tell the Tax Office when setting up a trust.
Seeking advice from an independent financial advisor may help work out if a family protection trust is a viable financial option for you and guide you through the set up and management process:
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