A family trust is a discretionary trust used to hold the wealth and assets of a family and is commonly used in Australia as an important part of the structure of a family business.
In a family trust, the beneficiaries are usually members of the same family or their company and trust, and then the family-controlled company acts as the trustee/company. The trustee has broad discretion, including discretion over the distribution of trust income to different beneficiaries. As a result, family trusts become a useful tool to reduce taxes paid, protect assets and limit risk exposure.
Advantage 1: Tax planning
Advantage 2: protect assets
Advantage 3: Passing on the family business
Despite the benefits of family trusts, there are also some drawbacks. Whether or not to establish a family trust will depend on your personal circumstances. Please contact Andrews’ tax team for independent advice on whether a family trust structure could benefit you and your family.
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