If your trust's gathering dust, check it's not an 'alter ego'
Monday 25 October 2004
Many New Zealanders' trusts won't stand up in court, warn experts. Rob Stock reports.
By The Landlord
Legal eagles are warning New Zealanders to get their family trusts reviewed because tens of thousands of them would not stand up in court.Lawyers Richard Taylor of Taylor Grant Tesiram and trust expert and author John Brown say many family trusts would fall foul of rulings grouped under the new buzz-word in trust-busting - the "alter ego" trust.
There are 231,000 trusts registered with the IRD, touching the lives of an estimated one in five New Zealanders.
They are there to protect assets for their beneficiaries and often to provide for those benefits to be passed on to the next generation.
Often trusts are set up by business people who fear creditors may one day come after their home should their business go belly up.
Sometimes they are set up by people who worry old age care homes will eat up all their assets before the state steps in to help.
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