Family & Special Purpose Trust

What is a Family or Special Purpose Trust?

Family and Special Purpose Trusts are types of Trusts designed to meet the specific needs of families or special circumstances. These Trusts can be used to protect family wealth, ensure long-term financial stability, or serve unique personal or philanthropic goals.

Benefits of Family Trusts

• • Wealth Protection: Family Trusts can be used to protect family wealth from creditors, legal claims, or potential disputes.

  • Generational Planning: These Trusts can help ensure that wealth is passed down through generations while controlling how the assets are distributed.

  • Special Needs Planning: If a beneficiary has special needs, a Family Trust can ensure that assets are managed to support them without affecting their eligibility for government benefits.

  • Tax Efficiency: Family Trusts can be structured to distribute income in a way that minimizes tax liabilities.

Types of Family and Special Purpose Trusts

1. Family Trusts
   A Family Trust is specifically created to benefit the members of a particular family. The Trust may allow for flexibility in how assets are distributed among family members, ensuring that wealth is preserved and managed responsibly.

2. Special Purpose Trusts
   Special Purpose Trusts are established for specific objectives, such as supporting charitable causes, providing for the care of a loved one, or ensuring the fulfillment of certain conditions (such as the achievement of a specific educational goal). These Trusts are highly customizable based on the unique needs of the family or individual.

3. Charitable Trusts
   A charitable trust is a special type of trust designed to benefit a charitable cause or organization. It provides tax benefits and ensures that the donor’s charitable goals are met even after their death.

4. Special Needs Trusts
   A Special Needs Trust is specifically designed to ensure that a loved one with a disability is cared for without jeopardizing their eligibility for government assistance programs. It provides financial support while protecting the beneficiary’s access to essential services.

5. Protective Trusts
   Protective Trusts are often used to safeguard family assets from divorce settlements, creditor claims, or other potential threats to wealth. This type of Trust helps protect the family’s financial legacy.

Establishing a Family or Special Purpose Trust

Like other Trusts, a Family or Special Purpose Trust requires a Trust Deed. The Trust Deed should clearly outline the specific goals of the Trust, the roles of the Trustees, and the wishes of the grantor. This document can be as simple or complex as needed, depending on the intended purpose of the Trust. Families or individuals with special objectives should consult with an estate planning expert to ensure the Trust meets their needs.

Roles of a Trustee

In family and special purpose trusts, the Trustee’s role is to manage the assets to achieve the specific objectives set by the grantor, whether for family wealth preservation, charitable purposes, or special needs planning. The Trustee must safeguard the assets, make prudent decisions for the benefit of the beneficiaries, and ensure that the Trust fulfils its intended purpose while complying with legal and tax regulations. Their responsibilities may involve restricted distributions, asset protection, or supporting long-term family goals.