By setting up a trust you (as the settler) hand over the specified assets to a trustee to look after for another person (the beneficiary). Trusts and the responsibilities of Trustees are covered by law.
A trust can help you to:
- protect your assets for the future
- provide for your family
- protect against creditors
- protect against income and asset testing
- reduce the chance of relationship/matrimonial property claims/disputes
- prepare for the time you might need in residential care
- set money aside for a child's education
- prevent claims on your estate when you die
- create a tax effective structure.
There are many different types of trusts and many decisions to be made in order to ensure the trust is appropriate for your personal situation. We recommend you meet with an NZINVEST expert to work through how a trust could meet your needs. We can help you work through the advantages and disadvantages so you can decide on your best option.
Under the Social Security Act, for Rest Home Subsidies, you must ‘gift' your assets to the trust over time and there are maximum values you can gift per year. Therefore the sooner you start the sooner your assets will be protected in trust. The assets must have been gifted for some years before they are fully protected from asset testing and creditors.