Protecting and Passing on your Assets | Pitt & Moore, Lawyers in Nelson
Protecting and Passing on your Assets
It’s long been held in the rural community that the family trust can be a useful ownership vehicle for holding family farms or agribusinesses. Indeed, evidence suggests that over 50% of farmland within New Zealand is held by family trusts.
As circumstances change, many New Zealanders are faced with the task of managing an array of increasingly complex family and property interests. While family trusts have historically been regarded as a means of addressing issues such as blended families, tax planning and the protection of assets for coming generations, are they still the best option?
In addressing farm succession planning, a common concern for farming families is how best to protect the farm against relationship property claims by a succeeding child’s partner or spouse. While trusts had in the past provided a means of shielding family assets from such claims, recent high-profile “trust-busting” Court decisions have challenged this position.
The relationship between trust law and relationship property law is complex and evolving quickly. Trusts can no longer be regarded as offering the protection they once did and alternative structures or additional measures need to be considered.
While a relationship property agreement can be a difficult concept to raise, a well-drafted agreement can provide the most effective means of protecting inherited property from relationship property claims. The discussions around such agreements and the financial disclosure required can prompt free and frank discussions, where all parties know where they stand and what the consequences of their actions will be. Often relationship property claims involving trusts arise where there is some confusion or uncertainty as to the ownership of property or who will get what if the relationship comes to an end. Addressing such matters at the outset with your lawyer can be the key to avoiding legal problems down the track.
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Contact our Inheritance Planning Team today to discuss how we can assist you.
Disclaimer: This article should not be used as a substitute for legal advice tailored for your specific circumstances.