There are a number of circumstances under which you should consider forming a trust. Some of the common purposes of a trust, and the structures utilised, will be discussed in this article. A trust is managed by trustees who are appointed by the creator of the trust (called the settlor(s)). Trustees manage the assets and debts of the trust for the beneficiaries specified by the settlor(s). There are several different types of trust structures that can be used. Your circumstances will determine which structure is most appropriate for you. Some types of trusts include: Single/Umbrella Trust – all assets are transferred to one trust Parallel/Mirror Trust – each settlor (for example a husband and wife or de facto partners) transfers assets to separate trusts for which they each hold governing powers Fixed Purpose Trust – provides for a specific purpose, such as the welfare of a child with special needs, for education, or for charitable purposes Given that a trust may continue after your death (up to a maximum of 80 years), it is often seen as having certain advantages over holding only wills to deal with your assets and debts. One purpose of a trust can be to provide for future generations. You may have a family that you wish to provide for into the future and following your death. A trust allows you to ensure any children, grandchildren or any other person you so wish, can be provided with some benefit from the assets transferred to the trust on the basis, for example, of reaching a certain age, or attending a certain academic institute. The distribution of assets held on trust may not be contested in the same way that gifts under a Will may be under the Family Protection Act 1955. Assets may also be protected from being caught up in any relationship property disputes with your spouse or de facto partner, depending on the timing of the creation of the trust and the relationship specifics. This can make trusts a good way of ensuring any children you may have receive any assets you intend for them. Another purpose of a trust can be to protect your assets from any liability you may have as a Director of a company, in providing a guarantee or security for the company. If you are considering forming or purchasing a company, then transferring your personal assets to a trust can guard them from any possible future problems with creditors. By separating yourself from the legal ownership of your assets, they may no longer be taken into account when it comes to calculating your entitlements to certain benefits and subsidies that require asset testing, such as the Residential Care Subsidy. There is no guarantee of this however. It is important to keep in mind that your primary purpose for establishing a trust must not be to transfer assets in order to defeat creditors or spouse’s/partner’s claims, avoid asset or means testing or to avoid or reduce your tax liabilities. Certain legislations prevent this, labelling the trust as a “sham” trust. However, as noted above, there are benefits that flow from having your assets held under a trust, but they must only be incidental to the main purpose for setting up your trust.