What benefit are family trusts?

i am 58 and marrying soon. I have 30 x the wealth of my partner. We have a prenup. But some lawyers say get a family trust and others say it makes no difference in the scheme of things.
My 4 children are 30-33 so there is no advantage in the trust by income splitting.

My plan is to slowly give my assets to the kids and at present am close to 50% cash.

My ex received half a few years ago and has a family trust with the kids as she is some 100 times the wealth of her partner. But I seem to get conflicting advice when I ask independent lawyers.

 

Are you already in a defacto? Is your pre-nup valid?

Family court can see through family trust or treat as a financial resource.

I have a method with trusts that may well protect your assets from your future spouse using family trusts controlled by your children. BUT - if they are spoused up then their spouses can get it. If they don't have spouses then it can work. Needs to be managed correctly and used correctly for the entire time. You intention would need to be preserving of capital for your lineage rather than defeating the ability of your spouse to access it.

Though mine has been used successfully, doesn't mean a family court in future couldn't see through it.

 

Do a google and you will find 100s of cases involving family law and trusts.

There are ways to set things up to improve your chances of having less chance of a spouse being able to attack and a few cases to prove this.

In NSW you also have to be concerned about the Succession Act and notional estate orders too.

 

Prenup is valid.
If marriage fails she receives a substantial and very generous amount which is the secret of a good prenup. IE enough to keep her very comfortable for the rest of her life plus house plus car.
Only 1 child married.

 

A

Also need to ensure that the lawyer who signed off on the prenup for her was sufficiently experienced and provided thorough advice to her about it.

A lot of lawyers have very little knowledge of trusts in general, let alone family law application to same. Some have enough to be dangerous, eg Family Court can see through family trust so no point in having one or don't consider various other aspects. Real property held in different states can be problematic with regard to land tax etc also.

I wouldn't advise someone with property in another state from me (QLD) with regard to the trust they hold that property in, would send to Terry W for NSW for example. Though I might advise on overall structure and send them to TW just for that trust. Sounds like you are best getting advice from TW overall, and if real property in other states he may refer part of that on. TW is a gun in this area, if he has capacity to fit you in.

Family trusts that specifically exclude spouses (or spouses of lineage) are often still within the scope of a family court settlement as a financial resource due to their incorrect usage. Vital that you and your offspring don't cut corners in operation and record keeping - better separation then less chance of FC seeing through it.

Money spent on a chat with TW would he money well spent.

 

I would set up diff corporate trustees for each trust and list yourself as director, the children as beneficiaries. The trustee can always dissolved or u can resign as a director . Until that point, you CONTROL but don’t OWN the assets and only your children or a related bucket company collects the net income.

But if you own a lot of assets already, the stamp duty to shift these assets into new trusts would be surely prohibitive.

OPTION 2 - a cheaper way is you can register 1st or 2nd Mortgages on your properties (under the bank) to entities controlled and owned by your children. Which then reduces your equity to zero or negative... it requires a circle of cheques strategy and inter-family loan agreements which a good lawyer can do

 

The problem with most of these strategies is that I have nearly 50% in cash, 35% in property and 15% in business.

 

How would this help in the family law context?

It doesn't really matter if you control or legally own assets as they can be attacked either way.

Have a look at the case of Kennon v Spry. Dr Spry was a barrister leading expert of trusts - he wrote the textbook on trusts. He wasn't even a beneficiary of the family trust, but the exwife beat him in the high court and the trust assets were attacked successfully.

I might start writing a serious of articles on family law and asset protection.