More and more financial planners are building estate planning into their advisory services. Setting up a trust for a client can seem straightforward - but it's just the proverbial 'tip of the iceberg'.
Wednesday, June 5th 2002, 9:24PM
What’s involved
When establishing a trust, trustees and advisers need to consider:
The form of the trust deed and memorandum of wishes
The process for transfer of assets to the trust, such as sales agreements, lease for life, assignment and transfers
Providing investment advice and ongoing management, taking into account the strict requirements of the prudent person rule
Taxation issues such as the need for IRD registration, tax returns, beneficiary returns and GST returns
Meeting accounting requirements
Holding trustee meetings, taking minutes, trustee resolutions, and maintaining an asset and liability register
Completing an effective gifting programme with a deed of acknowledgement of debt, deed of forgiveness of debt, and annual IRD Gift Statements
Feedback suggests some advisers are outsourcing trust management just as they do taxation, specialist risk advice and funds management. While the legal profession can provide invaluable advice in the establishment stage, it’s to professional trustee companies such as Guardian Trust that advisers are increasingly turning. Guardian Trust for example has been in the business of trust design and administration for decades, and has built up invaluable specialist knowledge.
Choosing what to outsource
Advisers and trustees don’t have to take a "take it or leave it" approach any more. With the introduction of new flexibility such as Guardian Trust’s FlexiTrust service, advisers can "mix and match" the services they want to offer and which ones to outsource.
Guardian Trust, for example, offers three levels:
Full trustee, where Guardian Trust is the professional trustee and undertakes all administration and compliance, on a complete outsourcing basis.
Trust monitoring service: for advisers who want to be the trustee but who want regular assistance with trust management, this approach means Guardian Trust acts as the "back office".
Pick and Mix. Pioneered by Guardian Trust with its FlexiTrust service, you tailor both the trust and its ongoing administration to suit your needs and abilities on a "pick and mix" approach. Because the services are available individually, you can choose to take care of any aspects of trust management with which you feel confident and capable, and outsource other tasks to Guardian Trust. It’s a cost-effective yet flexible approach that reflects advisers’ varying skills and capabilities.
Choosing your trust management company
Key criteria include:
Experience – how long and how extensive?
Range and depth of services. Are they represented nationwide? Have they got economies of scale?
Professionalism of staff, such as experience and qualifications
Profile and reputation. Are you familiar and comfortable with them? More to the point, will your clients be happy with them?
Find out more Guardian Trust is New Zealand’s leading estate planning and trust management company and has been managing trusts for New Zealanders for over 120 years. Call Guardian Trust today on 0800 801 135 to find out more.
