Trusts can provide a multitude of benefits depending upon your circumstances. Those
- Providing for your family after you are gone as a form of estate planning
- Safeguard your assets from unexpected financial misfortune
- Protect your assets or heirlooms from certain relationship property claims or
- Prevent claims against your estate and ensuring that your beneficiaries have
access to their inheritance without it being held up in probate
- Prepare for the time when you may need residential care
- Obtain certain tax advantages (if applicable)
- Anticipate and make allowances for capital gains or death taxes
- Business owners can protect their family home and other assets against business
debts under family trusts
- Shelter life insurance policies from risk exposure and gifting issues
- Preserve a high level of confidentiality concerning your finances
- Set an age that you feel is acceptable for your beneficiaries to receive their
Memorandum of Wishes
In conjunction with setting up a trust the issue of a memorandum of wishes needs to be
Many family trusts are set up as “discretionary trusts” i.e. who out of all of the
beneficiaries will receive
any distribution from the trust is up to the trustees to decide, receipt of a
distribution is not automatic
and should not be assumed.
The settlor of the trust may wish to provide guidance to the future trustees of the
trust of their wishes.
A memorandum of wishes will after the settlors passing, inform and hopefully guide the
trustees by making
a clear statement on how you wish the trust to be managed.
A memorandum of wishes can include:
- Put money aside for particular purposes, such as weddings, funerals, education
of certain beneficiaries;
- Directions on distributions to beneficiaries who may spend the money unwisely;
- Management of the trust’s assets;
A memorandum of wishes is not a legally binding document, it clearly sets out your
wishes to the trustees however the
trustees have complete discretion however it would be unwise of the trustees to
disregard a memorandum of wishes.
For settlors those who want more certainty over the trustees decisions could consider a
Deed of Distribution.