ANNOUNCEMENTS
Recessions bring about all sorts of changes. For example, in the legal beagle world, frequently people stop purchasing houses, so lawyers run out of conveyancing work. Conversely, money starts to get tight so people start to sue each other. This of course means extra litigation work for the lawyers.
Recessions can also bring about some pretty dramatic personal life changes. For instances, people can be made redundant which in turn, creates financial pressure. Frequently, this pressure spills over into their personal relationships.
Sometimes, facing financial pressure can bring a couple closer as they bury down in the trenches together. But often, the strain can lead to a couples’ relationship breaking down. When this occurs, people separate. We know this because in ordinary times about 42% of Kiwis do just that – separate.
When a couple separate they usually divide up their assets. If their assets have been placed in a Trust the inevitable question arises: What happens to the assets in the Trust? This question is of great importance because when a relationship breaks down, there can be a lot of fighting happening and frequently the only thing left standing is “The Trust”.
An Ounce of Prevention is Worth a Pound of Cure
First, before assets are placed in a Trust, all individuals should obtain good legal advice. This is absolutely essential in my view because when assets are moved from an individual to a Trust, an individual’s property rights are affected.
Secondly, the legal advice obtained by the parties will usually include a very strong recommendation for the parties to enter into a legal Property Relationship Agreement. Again, in my view, this is essential because it will set out the basis for future reference. Should a relationship breakdown after the assets have been transferred through to the Trust, this Agreement will become invaluable.
The individuals will be saved a huge legal bill as they will not have to go to Court to argue over the assets. Additionally, and most importantly, those same individuals will not have to suffer the enormous emotional burden going to Court places on a person.
Thirdly, an actual Agreement should be entered into between the parties. This seems almost a moot point considering we have just discussed the absolute need for the Agreement but you would be surprised how many people talk about getting an Agreement but never actually do it.
The Agreement, if prepared and executed, is likely to set out a variety of matters including an acknowledgment of what assets belong to each of the parties before those assets are transferred to a Trust. It may also set out what will happen to those assets when they are transferred through to a Trust should the parties ever separate.
Lastly, if an Agreement has been entered into by the parties and assets have subsequently been transferred to the Trust then the issue is pretty easy. This is of course providing the Agreement stated what was to occur should the parties ever separate. The Agreement is just placed before the Lawyers and hopefully everyone can agree to implement what the Agreement says.
In the normal course of events what this means is the assets of the Trust are sold, loans are repaid and the balance of the sale proceeds are put into the Trust’s bank account, ready for division between the parties.
Often at this point in time the existing Trust is made into one of the individuals own Trust and another Trust is set up for the other remaining party. So in effect, each of the parties ends up with their own Trust.
Then half the sale proceeds are sent to the new Trust and the other half of the sale proceeds simply remains in the existing Trust (which was previously turned into one of the individuals Trust).
two is better than one
It’s no secret that many smart people have two trusts. One each. Each Trust will hold its own assets and frequently a half share in the family home. Why have two Trusts rather than one? Again the answer is simple. If you have two Trusts you have the ability to deal with property that was solely your own before it went to the Trust. This could include family heirlooms.
Also, your own Trust can be the recipient of any inheritances you might receive, such as money from your own Parents. Overall, having your own Trust means you can deal with the assets in the Trust as you and your Trustees wish. You can do this without the consent of your spouse (assuming they are not your Co-Trustee).
Lastly, a very large advantage of having your own Trust is you then have the ability to leave particular assets to specific beneficiaries such as children you had prior to your relationship.
As mentioned above, another great benefit of having two Trusts is that both Trusts can own a half share in the family home. When two Trusts are involved they are also very likely to have entered into a legal Agreement which would have set out the steps to be taken if the parties ever separated.
So overall, a two Trust structure is frequently far superior to one. You do have to be aware that you will have double the set up and running costs of course, but this disadvantage can be far outweighed by the benefits a two Trust structure can confer.
when prevention hasn’t been taken
Here’s where all the trouble begins. The parties don’t ever enter into a legal Agreement and cannot agree on what is to happen with the assets that are in the Trust.
When this occurs only the lawyers win as the battle royale begins and legal fees start to mount. When I see this happening I call both clients. I try to give them a bit of a reality dose. This includes reference to the movie “War of the Roses”. If anyone has ever seen this movie we all know who the winners are and that is the Lawyers. A couple can spend literally thousands of dollars in legal fees as they fight over the assets of the Trust. Let’s face it … a house worth say $500,000 isn’t worth a couple spending $100,000 on legal fees fighting over.
Often, when you look at what is really going on, the individuals aren’t fighting over the house at all. They are fighting because they are hurt. The trouble is, that fight costs lots and lots of money if it goes on for a long period of time. It is also emotionally draining.
I’m not advocating that an individual shouldn’t engage lawyers when and where they are needed. All I’m saying is a little common sense needs to prevail in these situations. As a Professional Trustee I try hard to calm the parties and seek some form of agreement that I can send through to their Lawyers.
But if you can’t get an agreement, then what happens? Well the matter just has to go to Court. Which means the Courts look at how the Trust was established, how the Trust has been run over the years, who has control of the Trust, what assets have been transferred to the Trust and what loans the Trust owes back to the individuals.
Other matters can also come under scrutiny but in the main, these are the points the Courts will look at. Once the Courts review the matter they may make a variety of Orders. These can include putting an independent person in to run the Trust (act as a Trustee) as well making a monetary award.
I guess there are 3 main points to take from this article.
1. Get great Trust advice when setting up a Trust from a professional who really understands asset protection, estate planning, tax minimization and financial accounting. Get the very best advice you possibly can.
2. Seriously consider a two Trust structure and if you do decide to go down this route, make sure both Trusts have a legally binding Agreement as discussed above.
3. Get good solid legal advice and enter into a legal property relationship agreement.
Remember, if you want your assets to be protected, use a Trust. But do the right thing … get the right advice, from the right people and chose the right Trust structure to ensure that asset is truly protected.
Professional Trustee Services
Gilligan Rowe + Associates Ltd
Chartered Accountants
Learn more about Janet
Email: jx@gra.co.nz
Ph: +64 9 522 7955
P.S. Did you like this article? Go ahead and sign up to our free newsletter and receive tips, updates and useful information to help you protect your assets and grow your net worth. GRA are accountants who provide expert accountant advice both in NZ and offshore.
P.P.S. Check out our sister website, www.familytrusts.co.nz for more family trust information.
Dad, Where’s My Inheritance?
An interesting case has recently been handed down from the Courts. This case now provides Parents with the rights to strip their children of inheritances.
The judgment goes against what was previously believed good law.
To date, we have all thought that parents owe a duty to their children to provide for them in some way upon their deaths. The Courts have been littered with cases where children have brought claims against the estates of their parents when their parents failed to leave them a little something…
By and large the Courts have been sympathetic and have awarded children something out of their parent’s estates, even, in some cases, stating parents have a duty to provide for their children, irrespective of the child’s age.
Well that reasoning may go by the board if the latest case is anything to go by.
The Case
The case goes something like this. Dad, mum and two daughters lived happily together but when mum died and left her estate to dad, the two daughters fought over the estate. The result was the daughters ended up with $56,000 whilst dad received $20,000. The ultimate outcome however was the daughters fell out with their dad. This is a huge cost – far more than the money involved that’s for sure.
Dad decided that he would place his affairs with the Public Trust and so he completed a Will in which he left nothing to his daughters. He also left instructions with the Public Trust that they were not to tell his daughters about his death, his funeral or his Will.
Dad’s statement to the Public Trust went along the lines that his daughters gave him nothing, not even respect and that is what he intended to give them on his death - Nothing.
When Dad died the Public Trust actioned his instructions. Herein lies the problem. No death notice was published. The Public Trust did however advertise for creditors of the estate to come forward but none ever did. This is standard policy when dealing with a personal estate.
The Public Trust did not inform the daughters and the estate, valued at circa $250,000, was passed to his de facto partner, in accordance with the Deceases wishes expressed in his Will.
The eldest daughter, learned of her father’s death, about two years after the event. Two years is a long time in legal beagle land and time had run out for her and her sister to lodge a claim against her father’s estate. This however didn’t deter her. Instead, she sued the Public Trust, citing they had a legal duty to advise her of her father’s death. If she won the claim, she would likely received approximately $62,000.
The Judgment
The Court however didn’t quite see the daughter’s side of the story. Instead they issued a judgment stating that executors (the Public Trust in this particular case) did not have a general duty to inform potential claimants about a death or even a general duty to advertise for claimants. Rather, executors have a duty to tell a person only when they know that person wishes to make a claim. So, executors have to have actual knowledge of a potential claim rather than pre-supposing someone might make a claim.
The Court finished up by saying that the Public Trust did not have actual knowledge that the daughter would make a claim and therefore, was not liable.
Lessons for Us All to Learn
So what does all this mean for parents and children?
Well to start with, we want all families to play together and stay together. The emotional cost of falling out with each other is huge.
Secondly, we would like to see all assets held in a Trust not in a person’s personal name and personal legal capacity. Why? Because Trust assets can be passed from Trust to Trust meaning they can be passed from a parent’s Trust to a Trust established for their children upon that parent’s death. This protects those assets from creditors and the Official Assignee and of course, negates gift duty.
Thirdly, everyone should have an up to date Memorandum of Wishes. This document will tell your surviving Trustees what you want done with the assets of the Trust when you are dead.
Lastly, everyone should have a current Will which deals with the assets that you do actually hold in your personal name at the time of your death, such as tools, jewellery, etc.
Of course, asking your parents what they intend to do with your inheritance is often a difficult subject to broach. A way of opening up this type of discussion with your parents is to tell your parents what you intend to do with your own assets for your own children. Alternatively, you could always watch our DVD on the subject with your own parents and discuss the matter after looking at the DVD. It can be a difficult topic of conversation but there are ways to handle it and as always, open communication is the best policy.
One of the lessons to be taken from this case is if you want to protect the inheritances you are going to receive from your parents and if you want to protect the inheritances you intend to leave to your own children, ensure you take action.
Don’t leave assets in your personal names but put them into Trust and ensure you have current Memorandum of Wishes and Wills in place. Also make sure you have a good discussion with your parents about the topic and get them to transfer their assets to a Trust, later to be transferred on their death to your own Trust.
As always, if I can be of help with any of these conversations, just let me know. You can request an interview for a no obligation and confidential chat.
Professional Trustee Services
Gilligan Rowe + Associates Ltd
Chartered Accountants
Learn more about Janet
Email: jx@gra.co.nz
Ph: +64 9 522 7955
P.S. Did you like this article? Go ahead and sign up to our free newsletter and receive tips, updates and useful information to help you protect your assets and grow your net worth. GRA are accountants who provide expert accountant advice both in NZ and offshore.
P.P.S. Check out our sister website, www.familytrusts.co.nz for more family trust information.
What’s Your Game Plan when YOU die?
Last week a friend of mine unexpectedly passed away.
His passing left behind many family members and friends in great pain. It also resulted in quite a nightmare when it came down to dealing with his business and his personal assets.
Since this is a personal matter, you may be asking…Why am I writing this blog post and sharing this with you? Well I’m hoping that by telling this story, you will put in place the steps to ensure your affairs are in order - to ensure continuity for the people left behind when you die.
You see when someone dies, its hard enough having to deal with the loss. Having to try and take action to protect assets and run a business at the same time just makes a bad situation even worse.
Within two hours of death all Gilligan Rowe & Associates Partners had gathered and pledged help. The deceased was my friend, not a GRA client. But when a Partner at GRA needs help, all GRA partners stand together (that’s the wonderful thing about this firm).
Within 4 hours I had visited my friend’s business and spoke with his staff. Every staff member was in shock but every one of them agreed they’d help.
The Game Plan
The first job was to secure the technology in the business. This was not easy. No one in the business had any idea of the passwords the deceased used. This of course made our second job harder.
The staff (all 58 of them) had to be paid the following day. So now we had a situation where we had no access to money because we had no access to technology. If things weren’t bad enough, word was spreading within the industry and we had staff asking us what was going on, were they still employed, should they still go to their jobs tomorrow and would they get paid.
We had to come up with a solution quickly. We scrambled and managed to deal with the computer issue but it was pretty stressful at the time.
The next issue we had to deal with was the staff. All human beings like some semblance of order and continuity of staff was a question on everyone’s mind. So we called a staff meeting and amongst tears, told all the staff it was business as usual.
A serious issue that we had to deal with was how to protect the deceased’s business. One of the competitors was already visiting the businesses clients and offering his services. We dealt with this by putting in a temporary CEO and getting that CEO and the lead salesman in the business out visiting the clients, assuring them that despite the awful set of circumstances before us, the business would go on.
The last really urgent issue we tackled was trying to ascertain what assets the deceased actually had. Turns out he had a Trust, but that Trust contained both his personal assets and his business assets, and debt was completely cross-secured. Our investigation revealed that there was life insurance. We were all thankful for this because that would at least take care of some of the debt.
On closer checking however our hopes were dashed… The deceased had cancelled his life insurance because he was in the midst of taking out new policies with another insurance provider. We looked at this issue and decided to brief his lawyers on what we felt had to be done.
At that point, we all thought we’d done what we could, so we returned to our own company and got down to the business of dealing with our own clients’ affairs.
Lessons Learned and Checklist
A couple of days later all three Gilligan Rowe & Associates Partners discussed what could have been done differently. You see, we often look at situations in an attempt to improve the services we offer to our clients. We came up a few points and think that if these things had been done, dealing with this death would have been so much easier.
1. Write down somewhere the name of your bank account numbers and passwords. Keep this document secret. Put it with your lawyer or your accountant or better still, both professionals. Stipulate that the document is only to be opened and read upon your death.
2. Write a note to either your spouse, your lawyer or your accountant. Tell them what steps should be taken on your death. For example, does someone owe you some money which hasn’t been recorded in say your financial statements but which you want collected on your death? Do you want to be an organ donor? Write your wishes down so they are clear. Again, stipulate that the document should only be opened and read upon your death.
3. Ensure you have a current Will and that your lawyer, accountant and your spouse have a copy of that Will. Let me help you if you do not have one or need it updated.
4. Never cancel a life insurance policy without having another one in place. 5. Keep a copy of your life insurance policy with your lawyer, accountant or spouse.
6. Ensure the life insurance policy is in the names of the Trustees of your Family Trust.
7. Have a Trust but make sure personal and business assets aren’t mixed up. For example, put personal assets such as your family home in your Family Trust and keep your business assets, such as the shares in your business in your Trading Trust.
8. Have a current Memorandum of Wishes for each of your Trusts. Tell your surviving Trustees in your Memorandum of Wishes exactly what you want done with the assets of the Trust when you die.
9. Leave a copy of your current Memorandum of Wishes with your lawyer, accountant and survivor.
10. Have a game plan for your business. What exactly should happen on your death? Who should be put in the driving seat until your Trustees or your Executors can handle things? Write this down in detail, because if you have a thriving business, this plan is going to be absolutely invaluable in ensuring your business survives after your death.
11. Leave a set of house keys, business keys, etc with a friend so that someone has access to your business and your home to feed your pets and water your pot plants. You might have passed on but your pets and plants are still here and still need care.
I’m sure that there are many more tips we could follow. The above isn’t meant to be a comprehensive list. It’s just a list of suggestions to make life a little easier for those left behind so that we can get on with the business of grieving.
Of course we at Gilligam Rowe can help with any or all of the items on this checklist. For a confidential and no-obligation discussion on any of these points including trusts, wills, insurance or asset planning advice, please contact us.
Professional Trustee Services
Gilligan Rowe + Associates Ltd
Chartered Accountants
Learn more about Janet
Email: jx@gra.co.nz
Ph: +64 9 522 7955
P.S. Did you like this article? Go ahead and sign up to our free newsletter and receive tips, updates and useful information to help you protect your assets and grow your net worth. GRA are accountants who provide expert accountant advice both in NZ and offshore.
P.P.S. Check out our sister website, www.familytrusts.co.nz for more family trust information.
Family Trusts Explained
Everyone tells you to put your assets into Trust and they even tell you what benefits a Trust will bestow upon you but very rarely does anyone take the time to explain what a Trust actually is.
Well this blog post is going to do just that!!!
What Actually IS a Family Trust
A Trust can be described as many things and is often thought of as a device, a holding vessel or a protection vehicle. Sometimes it’s helpful to think of a Trust as a concept and if I apply this analogy I would liken a Trust to a ship, travelling over high seas. The Captain and his staff are charged with steering the ship, looking after the passengers and the ship’s cargo. Thus, the Captain and his staff are the Trustees. The passengers are the Beneficiaries and the cargo can be thought of as comprising the assets of the Trust.
But in my view however, a Family Trust is a whole lot more than simply a device or a concept. It’s more a collection of relationships. The person creating the Trust (called the Settlor) has a relationship with the people they put in to run the Trust for them (called the Trustees). The people in charge of running the Trust also have a relationship but their relationship lies predominately with the people the Trust has been set up for (called the Beneficiaries).
So in a Trust a daisy chain effect is occurring. The Settlor places their faith in the Trustees to run the Trust in accordance with the rules they have laid down in the trust deed and the Beneficiaries place their trust in the Trustees to look after the assets of the Trust and to act in their best interests.
For those readers who want to know how a Trust is defined in legal speak, its often been said a Trust comprises a set of equitable obligations with the Trustees owing obligations to look after the property they have control of for the benefit of the Beneficiaries.
How Long Does A Family Trust Go On For?
How long do all these relationships go on for? Well that will depend.
First, the Trustees generally, in the ordinary course of events, will only owe an obligation to a Beneficiary whilst they are actually a Trustee. So as soon as they retire or resign as a Trustee, their obligations cease.
Secondly, all these relationships will come to an end when the Trust ends. When does this occur? In the first instance, it will be within 80 years of the Trust being set up because a Trust cannot exist for more than 80 years at law. But in some cases, a Trust is brought to an early end by the Trustees. This process is called ‘early vesting’ and it simply means bringing the date that is specified in the trust deed forward. So when this happens, all the relationships will cease as well.
Why Would You Even Want A Family Trust?
Lots have been written about the reasons why someone would want to set up a Trust but in the main, there are 4 motivations for creating a Trust:
Reason 1 – Asset Protection
In my view this is probably the primary rationale for setting up a Trust – to move assets into the Trust so they become protected against creditors, WINZ and other parties. But remember, if the documentation isn’t correct and if the transfer documents don’t contain those special Hawkins and entrenchment clauses we so often talk about, asset protection will indeed be threatened.
Reason 2 – Tax Minimisation
I’ve said it often enough – no one wants to pay more pingers to John Keys than what they have to. Trusts, if established correctly, can help you legally minimize your taxation liabilities. A caveat however applies. You must take specialised advice when setting up Trusts and other structures to ensure the structure is tailor made to suit you and your circumstances.
Reason 3 – Asset Testing
I’ve already written a blog about this so there isn’t much of a need to say anything lengthy here expect this – if you need help in the form of a subsidy from the government, such as a rest home subsidy, you will be means tested. If you own nothing, the subsidy will be available immediately. Moving assets to a Trust under the GRA method means you will be asset poor but you will have control over the assets that are held by the Trustees of your Trust. Remember the GRA motto – own nothing but control everything!!!
Reason 4 – Provision for Future Generations
Often a family will acquire assets and will want to ensure future generations can enjoy those assets. For example, Mum and Dad might buy a Kiwi Bach and want their children and their grandchildren to be able to enjoy it for years to come. One way of ensuring the asset is protected for future generations to use and enjoy is by putting it in a Trust with specific trust deed provisions so that the Trustees cannot sell the asset in future times.
SUMMARY
From reading this article you might already know how I think a Family Trust can be explained. Simply put, I believe it’s a whole set of relationships which help you lose your tie and keep your shirt. Those relationships help you relax because by their very existence they protect your hard earned assets now and in the future for you and your family.
So … if you want a bit of peace of mind and if you are serious about protecting what’s yours, please contact me me to discuss establishing a Trust. Alternatively, if you already have a Trust in place and want to ensure you get the very best out of it, call me and I will help you travel those high seas safely.
Best wishes,
Professional Trustee Services
Gilligan Rowe + Associates Ltd
Chartered Accountants
Learn more about Janet
Email: jx@gra.co.nz
Ph: +64 9 522 7955
P.S. Did you like this article? Go ahead and sign up to our free newsletter and receive tips, updates and useful information to help you protect your assets and grow your net worth. GRA are accountants who provide expert accountant advice both in NZ and offshore.
P.P.S. Check out our sister website, www.familytrusts.co.nz for more family trust information.
What is a Professional Trustee? Do I Really Need One?
Many people ask me what is a professional trustee is, what they do, and what value they can bring to a trust. Often, these people are considering how they want to structure their asset holdings and what sort of return they want to make from them.
The simple answer is that a professional trustee who does their job keeps you out of trouble and usually, out of expensive trouble that you wouldn’t have seen coming.
We’re like the Family Trust Police.
What is a Professional Trustee?
A professional trustee is a person (or a company) who acts as a trustee of a trust. That person (or company) has no interest in the assets of the trust – that is they are not a beneficiary of the trust and are not entitled to share in the assets of the trust.
What does a professional trustee do?
Generally speaking, a professional trustee’s function is to work with the other trustees of the trust in looking after the beneficiaries, the trust assets and in administering the trust. The difference is that a professional trustee is trained to understand what has to be done when running a trust.
Some of the functions professional trustees carry out are:
• arranging meetings with the other trustees to discuss transactions the trust is going to undertake, such as buying property, purchasing shares, obtaining loans, etc;
• making unanimous decisions with the other trustees;
• considering the existing investment policies of the trust and discussing with the other trustees whether these policies should be changed;
• signing appropriate documents with the other trustees such as agreements for sale and purchase and loan documents;
• Ensuring all the decisions the trustees make and the affairs of the trust are correctly recorded in minutes and in deeds;
• checking gifting is completed;
• other miscellaneous matters such as checking insurance policies are up to date.
Ultimately, a professional trustee’s role is to check that the interests of the beneficiaries are considered, the assets of the trust are protected for those beneficiaries, and the trust is running correctly.
Why Should you Have a Professional Trustee?
It is important to remember that trusts are set up for a variety of reasons such as protection against means testing (eg: aged care fees), a defence mechanism from property relationship claims, and for asset protection.
However, a trust will only protect assets if the trustees carry out their functions correctly: This includes administering a trust properly. If trustees don’t meet their duties, allegations can be made that the trust is a sham and if those allegations are substantiated, asset protection can be lost. Ultimately, this can result in the trust assets being made available to satisfy claims, for example claims by creditors.
As noted above, professional trustees assist other trustees by ensuring all of them meet their legal duties and responsibilities. For instance, a professional trustee can make certain the trustees meet regularly and record all the transactions the trust undertakes.
Additionally, the presence of a professional trustee who does their job right can demonstrate that the trust is real. Assuming the professional trustee carries out their functions properly, the chances of a successful allegation of sham trust should be minimised.
Professional trustee fees
Professional trustees usually charge fees, on the basis of holding the position of trustee. It is a small amount of money for the security received. For more information on our Professional Trustee fees, please contact us.
Professional trustees will take out insurance policies in respect of their functions and there is a cost to this. Also, professional trustees may charge for the work they do on behalf of their co-trustees and on behalf of the trust.
For example, a professional trustee can charge a fee for preparing minutes and executing documents.
Recently, in a couple of cases, the courts favoured the appointment of professional trustees. These cases showed that having a professional trustee gave credence to the existence of the trusts and the transactions undertaken by the trusts. So, despite the fees that may be charged, serious consideration should be given to appointing a professional trustee.
So in Summary:
Having a professional trustee is not legally necessary, but it can be an enormous advantage. Professional trustees are usually well acquainted with trustee duties and what action has to be taken to satisfy those legal responsibilities.
By a professional trustee assisting in all trustees meeting their obligations, such as having meetings, making decisions, looking after trust assets and correctly documenting and administering trust affairs, the chances of successful allegations of sham trust are decreased.
Whilst a mechanic isn’t legally required to carry out all car repairs, most people want to ensure their car is safe and so usually have a mechanic do repairs.
Not using a mechanic might save a few dollars but ultimately, could result in some nasty consequences. Having a professional trustee who carries out their functions is much the same – the benefits can far out weight any costs involved.
Individual trustees are often busy people, leaving little time to administer the trust under their control.
Additionally, just like many of us don’t know how a car engine works and wouldn’t know how to carry out car repairs, many people don’t know how to meet their trustee duties and how to administer a trust.
Remember, trustees are personally liable to all the beneficiaries of a trust and unfortunately, ignorance of their duties is no excuse in the eyes of the law.
Thus, DIY trust administration practice is not dissimilar to undertaking car repairs – savings on professional trustee fees may seem a great idea initially but those savings can be outweighed by the costs faced when a trust structure fails through DIY practice. Cheap can be expensive in the long run.
We have now just completed the end of the financial year and this is an ideal time for trustees to ensure trust administration has been done correctly.
It is also a good time to consider whether appointing a professional trustee is warranted.
Check out our Family Trust as well as our Professional Trustee section of this website for more information, or if you have a question or would like to speak us, please contact us now. We’re here to help.
Professional Trustee Services
Gilligan Rowe + Associates Ltd
Chartered Accountants
Learn more about Janet
Email: jx@gra.co.nz
Ph: +64 9 522 7955
P.S. Did you like this article? Go ahead and sign up to our free newsletter and receive tips, updates and useful information to help you protect your assets and grow your net worth. GRA are accountants who provide expert accountant advice both in NZ and offshore.
P.P.S. Check out our sister website, www.familytrusts.co.nz for more family trust information.
Free Strategy Interview (Limited Time)
Matthew Gilligan
For a limited time, GRA is offering investors and business owners a Free Strategy Interview (normally $199) with me and my team at GRA.
After listening to you explain your situation, we could discuss:
- Structures
- Asset planning
- Insolvency
- Family Trusts
- Property Accounting
- Property Investment
- Financing
…in fact anything on your agenda that might help you to protect and grow your net worth in 2009 . We’ll also give options and ideas that may end up making and saving you huge amounts of money.
If you live outside of Auckland…no problem, we can talk over the phone and work by email.
You’ll need to be quick so go ahead and scroll down to contact us because this offer is limited by demand and the time available. We reserve the right to end this promotion at any time.
Matthew Gilligan CA CPP
Director
Gilligan Rowe + Associates Ltd
Providing Security to Real Kiwis Earns Top Trustee Award
Janet Xuccoa, Professional Trustee Services
Just this week Gilligan Rowe + Associates Ltd, (through our trustee company Cornwall Trustees Ltd) was awarded the prestigious ‘2008 New Zealand Corporate Trustee of the Year’ award by the New Zealand Trustees Association.
Naturally, we’re pleased. But while it may be a big deal in our little world and make us feel pretty good about ourselves for a second or two, it’s only on reflection that the real message behind this story jumps out.
And that message is all about two things: security and procrastination. Let me explain.
According to Errol Anderson, Registrar NZ Trustees Assn, “A real strength of this Corporate Trustee (GRA) is the hands-on commitment from the Directors through to clerical staff where their integrity and personal belief in the structure and process provides the client with a high degree of security.”
It’s this ‘high degree of security’ that I really want to impress upon readers. It seems like we all want it, but in many cases never believe that ‘out-of-the-blue’, negative, life-altering events can ever affect us.
It’s sad. We see it time and time again; New Zealanders who want the protection of a business or family trust after a major financial disaster, relationship split or unexpected life event! And while we can help some people and protect them from future events, most often it’s just too late!
In short, I believe Professional Trustees are not meant to be in the ambulance business. To me, we’re in the protection business.
Procrastination and putting off decisions to set up a Trust can cause pain. Real pain. And it’s not just financial. It can also affect health and relationships. We know because we get to see it all too regularly.
So, rather than tell you train-wreck stories about people who get it wrong (hmmm, maybe a good idea for future articles?), I’ve decided to share a TRUE good news story where our client actually did the right thing, made the decision, and took action.
For privacy reasons, we’ve changed our client’s name in this story…We’ll call him ‘Mike’.
Mike and his business partner had grown their services company to a very large and successful enterprise in NZ. They had a firm with a recognisable brand and a great reputation.
Everything was looking up and looking good. It would have been easy for John to simply believe that they we’re bullet-proof. After all, the company was expanding and making money.
But he didn’t. He knew that in business (and life) things can come out of ‘left field’ which you may have no control over. So three years ago, he contacted our firm and set up a Trust. Full financials were completed and all Trust administration including gifting was concluded.
Along with his business partner, Mike had business dealings in Australia and gave personal guarantees to a creditor. Sadly, the company got into financial difficulties (through no fault of Johns) and John’s partner elected voluntary bankruptcy. This automatically involved Mike and bankruptcy proceedings are presently underway.
Is Mike happy that his business failed through no fault of his own? No. Is Mike relieved that he didn’t procrastinate and took action to establish a Trust to protect his assets? Yes!
The relief came because as Professional Trustees, we understood his situation and we had a strategy. Next, we implemented the strategy and reviewed his situation each year for three years. In this case, our client is protected.
We have an industry in New Zealand that we can be proud of. So, on the outside while some people might view our job as a mystery or even stuffy, we know that as Professional Trustees it’s all about helping people to protect what’s important.
We have a good industry full of good and professional people who care. But while we think we’re good, we’re not good enough to force you take the first step.
That job’s completely over to you.
Janet Xuccoa
Professional Trustee Services
Gilligan Rowe + Associates Ltd
FamilyTrusts.co.nz
(09) 522 7955
janet@FamilyTrusts.co.nz
_____________________________________________
More Information?
If you have any questions or queries relating to asset protection or family trusts you can Request-A-Call for a no-risk chat or to set up an interview. Otherwise just call Janet Xuccoa. Janet can be contacted by emailing janet@familytrusts.co.nz or telephoning (09) 522 7955.
© Gilligan Rowe & Associates Ltd. Disclaimer: This answer is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive, nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
