What is a simple family trust?

In most estate planning scenarios, a family trust is simply a trust that benefits the family members of the individual who’s setting up the trust. In trust terminology, this person is known as the grantor or settlor of the trust, while the family members who benefit from the trust are known as the beneficiaries.

Is a family trust a sole trader?

If a company trustee is used, the trust offers all the same asset protection benefits as using a company structure, along with the additional benefits of using a trust. A trust that has individuals acting as trustees exposes the trustees (the individual, or individuals) to same levels of business risk as a sole trader.

What are the characteristics of a simple trust?

There are three basic characteristics that define a simple trust: 1 The trust must annually distribute to the beneficiaries any income it earns on trust assets. 2 The trust cannot distribute the principal of the trust. 3 The trust cannot make distributions to charitable organizations. More …

What does it mean to have a family trust?

A family trust is an inter vivos discretionary trust which means it is established by someone during their lifetime to manage certain assets or investments and support beneficiaries, such as family members.

Can a trust be the sole beneficiary of a company?

However, as with all trusts, a trustee cannot be the sole beneficiary. This means that you’ll also want to appoint other beneficiaries, such as family members to benefit from the trust. Collin Wilson is the trustee for the Wilson family trust. He is the director of his own company, ‘Wilson Enterprises Pty Ltd’.

Can a family trust be excluded from a property settlement?

In the event of a family law property settlement, assets held in a family trust may have a higher likelihood of being excluded from a property settlement than assets held directly by an individual.