WHAT IS A TRUST?
When someone who owns assets and perceives that these could be put at risk or could have some potential for loss, that person would therefore look to divest or remove themselves from those assets, however at the same time still wishing not only to enjoy the use of these assets but also to control them. To continue to do so they will then look to transfer the assets to Trustees of their Trust. The Trustees then hold these assets on behalf of the family group, rather than the individual.
It is common in New Zealand for those who establish the Trust to be kept in total control of this new entity as most fear that they will otherwise lose control of their assets. Most would therefore agree that in order to achieve this control you must also be a Trustee. We would agree with this advice however we maintain that you cannot possibly control something that you simply do not understand. This in our view is where Trusts have the potential to be challenged as the individuals that are in ‘control’ of the Trust simply do not understand the new position that they take. At MWA we look to educate as it is only with knowledge that you can successfully manage and control your Trust.