Albany Trust Lawyer – Protect Your Assets

Very few people understand what trusts are and why they need one. Below are some insights and why you need to contact an Albany trust lawyer.

 

For instance, many people think that they still have the ownership of their assets, even after transferring them to a trust. This isn’t true. Once you transfer your investments to a trust, you no longer own them. The trust becomes the owner of these assets. You could be either a trustee or a beneficiary, or even both, but you aren’t the owner any longer. An Albany trust lawyer can explain the workings and limitations to you.

 

Why Do I Need A Trust, Anyway?

A family trust is nothing else but a legal entity which owns a range of assets. Since there’s no individual owner of these investments, creditors can’t make a claim on them, should their previous owner face financial difficulties.

 

This is how investors protect their assets and pass them to the beneficiaries of the trust.

 

More Reasons For Having A Trust

If the trust makes a profit, this income will be distributed among the beneficiaries of this trust. The tax rate on this income may be different from the regular tax rate of an individual.

 

This is why, for long-time trusts were used as effective means to lower taxes. However, that has changed, and trust tax rates are now in alignment with income tax rates.

 

Leaving this aside, there are legitimate reasons to set up a trust. Here are a few examples:

 

– An individual can use a trust to pass on their assets to children rather than to divorced partners or extended families.

– A trust can prevent former partners from making claims on your assets after you pass away.

– A person can ring-fence and provide finance for education for children or grandchildren.

 

These are good reasons for individuals to choose a family trust to protect their estate after their death.

 

Problems That May Arise

Many people have used trusts only to lower their tax. Some individuals go as far as to put their business within a trust and then pay themselves a very low salary to save on tax. Under these circumstances, it’s easy to understand why the tax department doesn’t like trusts and try to nail down what they call “sham trusts.”

 

Sometimes, trustees had to pay heavy penalties after losing their cases in court to the IRD.

 

The other problem is that family members cease to own these assets, once they’ve been sold to a trust. Sometimes, some of these individuals understand very late that they no longer own those assets. They decide to take their case to court, leading to a stressful experience and to spending a lot of money seeking for justice.

 

How Much Does A Trust Cost?

A family trust is subject to complex legal and taxation rules and regulations. This is why you have to be very careful when choosing a lawyer to draw up your Trust Deed. This is far from being the cheapest or the easiest job ever, so you should find an experienced trust lawyer to handle it.

 

The lawyer will also arrange the sale of your assets into the trust. The paperwork, the legal fees, and the valuation of these assets will also cost you some money. The trust has to pay a reasonable price for your assets, as otherwise the tax department will be after you. You can’t agree to prices too different from the average market value, without getting caught by the tax department.

 

Ongoing Admin Costs of a Trust

At the same time, you should know that there are also ongoing trust management costs. The trustees will need an accountant to draw up their accounts.

 

The Annual General Meeting, the minutes and the other different records you need to maintain involve a series of fees you have to know about. Lawyers and other service providers will handle all administration documents for a fee.

 

Conclusion – Seeing An Albany Trust Lawyer

As you can see, setting up and maintaining a trust involves some significant expenses. Besides, this may generate disputes within your family. This leads to the question whether a trust is worthwhile or not. You are the only one who can answer this question, but you can get good advice from an Albany trust lawyer so that you can weigh all pros and cons before making a final decision.

 

If you want to discuss a family trust with a local Albany lawyer, McVeagh Fleming has a team of lawyers who can help.