Q & A

Q What are the Steps in Delegation?

Identity – Tasks that do not need you
Document – Write the process
Train – Show, Supervise, Test
Trust – Once reliable Let people fail small to win big
Review – Check outcome periodically, not every step
Repeat – Other Tasks, until no Tasks left (edited)

Q What Assets belong inside a Trust?

Assuming there are no net Tax Benefits in maintaining these assets outside a trust, then:

Assets meant for Kids & Grandchildren
Bank Accounts
Bank & Corporate Notes you’re owed
Brokerage Accounts
Business Ownerships
Classic Cars
Heirlooms
Intellectual Property
Interest Bearing Deposits
Investments in managed funds
License Fees
Life Insurance
Real Estate
Retirement accounts (beneficiary after spouse)
Royalties
Valuable Art works
Valuable Inheritances
Valuable Personal property

Q What name do you put Trust Assets in?

Usually you put Assets in the Trustees name. You will then have a supporting Trustee Minute or a simple one page Bare Trust to evidence the purpose behind the transfer to the Trustee or for purchasing in that name, was on behalf of the Trust. Similarly ,when opening Trust Bank accounts you usually just open in the Trustee name to avoid delay and complications from the bank lawyers reviewing the Trust deed.

If say, you put your home in your Trust, then the ownership transfers to that Trust and it also is transferred into the Trustee name. With home insurance,

Insurance Companies write policies to cover specific people or Entities, as owners, but not contracts like a Trust. So the Insurance policy is also put in the matching Trustee’s name to ensure you are properly covered.

Q Can a Trust also have SubTrusts?

Yes. Properly structured deeds have the ability to set up any number of SubTrusts for whatever purpose.
For example, your children your trust needs should include the right type of SubTrust, sometimes called a “Beneficiary Asset Protection Trust” or “Dynasty Trust” or “Inheritance Protection Trust”. With this SubTrust your children’s share of their inheritance is able to stay in the Trust for their Benefit.

This means it cannot be counted or taken:
I) in a Divorce.
ii) in a Lawsuit
iii) by Creditors
iv) by Government

It makes a Revocable Living Trust a whole lot more and provides lasting protection.

Q How should you store your records for the future

Electronically on a secure server, trusted advisors and also in a Fire and Water proof safe.

Q What is a Testamentary Trust?

A Testamentary Trust is a Trust that is formed as part of your will.

It does not exist while you are alive.

If its written into your will, your beneficiaries can elect to take their inheritance into this Trust

It has a range of Benefits but the major ones are:
Asset Protection & Tax Planning

Asset Protection: having them in this trust protects your children’s assets from someone or a spouse who wants them.

Tax Planning: you are able to select which Beneficiaries are to receive income in any financial year.
The advantage over other Trusts is that income that is distributed to minors is taxed at adult rates, so they get the benefit of the adult tax free threshold and lower rates

Q. What is a Trust?

A trust is basically an agreement between yourself and three parties

First, the Trust maker who creates the trust. Usually called the Settlor or Grantor.

Second, the Trustee this is who manages everything and makes the day to day decisions. It is sally a private company with you as the director. But it may be an individual.

Third the Beneficiaries .. this is who Benefits from the Trust. It is usually your children and maybe a charity.

Your role is usually as the Appointer who can appoint or change the Trustee as you decide, from time to time. A secondary Appointer can be specified if you are no longer able.

Q What is a Revocable Trust

A Revocable Trust aka Revocable Living Trust or Living Trust or Inter Vivos Trust (created during lifetime) is a flexible trust that allows you to manage your assets during your lifetime and transfer them directly to beneficiaries upon death, bypassing probate. It allows you, the grantor to change, amend, or terminate the trust at any time.

Key Aspects

Estate Management: enables you to act as both trustee & beneficiary, retaining complete control over assets while alive.
Probate Avoidance: assets held in trust pass directly to beneficiaries without the time and expense of court probate.
Incapacity Planning: if you become incapacitated, a pre-appointed successor trustee can manage trust assets for your benefit.
Privacy: unlike a will, which is public, a trust is private.
Asset Management: allows you to structure how assets are distributed to beneficiaries (e.g., in stages).

Features

No Asset Protection: Because you retain control, assets in a revocable trust are generally not protected from creditors or lawsuits.
Taxation: The trust is considered a "disregarded entity" for tax purposes; income is reported on your personal tax return.
Control: It can be amended or revoked completely at any time, unlike an irrevocable trust.

Q What is an Irrevocable Trust?

An Irrevocable Trust aka Non-Revocable Trust. Other of this type include:

Fixed Trust / Unit Trust: Sometimes functionally act as irrevocable because the beneficiaries' entitlements are locked in and amending them requires significant legal action.

Testamentary Trust: A trust created by a will that becomes irrevocable upon the death of the testator.
Charitable Trusts: Often structured as irrevocable to lock in funds for charitable purposes.
Irrevocable Funeral Trusts: Used to set aside assets for funeral expenses, which are legally protected once created.

An Irrevocable Trust is a legal agreement where a Grantor aka Settlor permanently transfers assets to a Trustee of a trust for beneficiaries. On the face of it losing ALL control and ownership. However, this can be mitigated by being the sole director of the Trustee and/or the Appointer to the trust, which has the power to change the trustee at any time.

Once established, the trust deed cannot be amended, revoked, or terminated without consent of ALL the beneficiaries.

Key Features

Asset Protection: used to protect assets from lawsuits or bankruptcy, as they are no longer legally owned by the grantor.
Estate Planning & Probate Avoidance: ensures specific assets pass directly to beneficiaries (e.g., children/grandchildren) without going through probate.
Tax Planning: able to vary the distribution of net profit to beneficiaries each year.

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