Creating a trust and transferring assets to the trust is only the first step in forming a flexible vehicle for the administration and protection of your assets.
If you wish to maintain the integrity of your trust and continue to benefit from the asset protection that it can offer, then it is imperative that your trust is properly administered at all times. Responsibility for administering the trust lies with the trustees and failure to do so is one of the most common reasons that the Courts will ‘look behind’ a trust structure and ‘attack’ its assets.
To help maintain the integrity of the trust, it is recommended that the trustees at least do the following:
- Meet annually to review the trust’s affairs and assets and to consider the needs of the beneficiaries.
- Consider whether there have been any further advances or gifts made to the trust — such as:
- the transfer of personal funds to the trust to fund the purchase of trust assets; or
- the cost of any improvements (e.g. alterations, additions, renovations, landscaping, etc.) made to a trust asset and paid for out of personal funds.
- Record any such further advances or gifts.
- Ensure all trust transactions are duly authorised by appropriate trustees’ resolutions, and that all such resolutions are kept in a trust manual or minute book.
- Prepare any necessary annual financial statements for the trust.
Wakefields Lawyers offers a subscription service for annual trust administrator support to assist with all of these duties and ensure that your trust is administered correctly so that it is able to stand up to any potential challenges.