By Jonathon Cron

When is the best time to establish a family trust? In many cases a trust can only achieve the objectives it was set up for if it is established well before it is needed.

The limited amount that can be gifted by the settlors each year, and the fact that gifts within five years can be clawed back, means for some purposes trusts will be ineffectual if not set up well in advance.

Once a trust is established there are still plenty of pitfalls if it is not administered or managed proficiently.  

Even if it is well administered there are more pitfalls if the assets that are accumulated are not protected when they are passed to the next generation.

Jonathan Cron uses four scenarios to illustrate what a family trust can be used to achieve and also how things can go wrong through lack of planning or knowledge.

Completely up-to-date with the 2010 budget changes this book explains how trusts work without any legalese jargon.

Jonathon says: In writing this book, I looked at the various issues that I see daily in a professional capacity. My emphasis was not on informing people why they need a trust, but rather on educating people about trusts in New Zealand. As trusts have become more and more popular, there seems to be a real lack of education and professional advice, particularly in relation to the administrative requirements of the modern-day trust. It is these administrative requirements that we are seeing increasingly under the microscope.

I certainly believe that very shortly an absolute test will exist for trusts and this will be based on the accuracy of the administration and therefore the administrative compliance for trusts will become a catch phrase to defeat allegations of a sham trust or alter ego trust in New Zealand.

There are in excess of 200,000 trusts in New Zealand, and experts suggest that over 75% of these would be subject to a successful challenge, whether from the IRD or a court action. This certainly suggests to me that the actual administration of trusts has been neglected to such a degree that education is now an absolute necessity.

The sheer number of people who have been advised to manage their own trust without any support or guidance is staggering. This advice seems to stem from a control point of view, as many expect that having a professional independent trustee would impact on their ability to control their own assets. However, nothing could be further from the truth. A major issue must be considered: How can you possibly control something that you simply do not understand?

So, with this book, I am hoping to give you back control in the form of education. I gained a tremendous amount of enjoyment in writing this book, and am hopeful that you will have a similar experience in reading it.

About the author:
Jonathon Cron is the founder of NZ Trustee Services. He is regarded as one of the country's foremost practitioners in family trusts. As well as acting as a trust advisor, Richard runs regular seminars on the subject each week to banks and finance companies.