Farm Structuring Partnership or Trust MULCAHY & CO | P 03 5330 7200 | INFO@MULCAHY.COM.AU | 300B GILLIES ST NTH, BALLARAT
Many Farms Operate as a Partnership which includes Family Members Farm Partnership Partners Dad
Mum
Children
THE PROBLEM WITH A STANDARD PARTNERSHIP Whilst a partnership is a very simple structure, it has the following issues:
THE ANSWER: FAMILY OR DISCRETIONARY TRUST
1.
Taxation- Limited flexibility
2.
Asset Protection- Does not exist. Each partner is liable for the actions of other partners
3.
Does not distinguish between the farming business and farming assets
4.
Succession & Estate planning issues
Family Trust Shareholder Director
Trustee (XYZ Pty Ltd) or (Mr Z & Mrs X)
Appointor
Individuals Family Trust Assets/ Business
Loan From
A
B
C
Loan Accounts D
Beneficiaries IMPORTANT DISCLAIMER: This document does not constitute advice. Clients should not act solely on the basis of the material contained in this document. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of these areas. This document is issued as a helpful guide to clients and for their private information.
ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU
MULCAHY & CO | P 03 5330 7200 | INFO@MULCAHY.COM.AU | 300B GILLIES ST NTH, BALLARAT
FAMILY TRUST Holds all asset
TRUSTEES Has the discretion to advance capital and/or income to beneficiaries. (The Trustee can be a company or individuals) A company as a trustee has shareholders and directors.
APPOINTOR: Guardian or Director Power to sack the Trustee and appoint new Trustee. (Most powerful position)
BENEFICIARIES List of people entitled to take the income or capital normally includes the Applicant, their parents, their brothers and sisters, their children and their spouses, grandchildren and any charity. (The trust Deed will set out who is a beneficiary)
LOANS Money can be owed to the trust by you or by the trust to you.
Your Will & The Family Trust ASSETS OF THE FAMILY TRUST The assets of the Family Trust are not pert of your assets and therefore do not come from part of the assets that are controlled by your Will.
WHO SHOULD BE THE TRUSTEE AND APPOINTOR Be careful not to have one of the beneficiaries of the Family Trust (remember to look at the list of beneficiaries in the Trust deed) in control of the Family Trust as they have complete discretion and control of the assets of the Family Trust. You may wish to have an independent person in the position of Appointor as this person will have no conflict ion following your wishes.
LOAN ACCOUNTS Make sure that you understand the effect of large amounts owing to you by the Family Trust or by you to the Family Trust. The Trust may owe money to your children or other members of the family. This is a legal debt that they can demand to be paid to them.
SUPERANNUATION Superannuation is becoming significant assets for people to consider when making their Wills. Unfortunately, it is becoming more complex and it is important that when making a Will you understand the consequences of your Superannuation. This is a guide only and should not be treated as legal advice.
We offer a free no obligation meeting to review your situation. Call us today on 03 5330 7200 and take advantage of this valuable offer.
CONTROLLING THE FAMILY TRUST ON YOUR DEATH
Are You Financially Secure?
At Mulcahy & Co we are in a unique position to provide the expert advice and solutions of accounting, financial planning, lending, legal and information technology all under the one roof. This makes a normally complicated process seamless to help you on your way to becoming financially secure.
WHAT DOES BEING FINANCIALLY SECURE MEAN? It means assessing your personal and business goals and developing a plan to achieve them. 1. Goals & objectives 2. Estate plan 3. Risk plan 4. Asset protection plan 5. Taxation plan 6. Debt plan 7. Retirement plan 8. Business plan 9. Superannuation plan 10. Investment plan FOLLOW OUR 10 STEPS TO SUCCESS TO ACHIEVE FINANCIAL SECURITY... Visit www.mulcahy.com.au for more information
The only way to control your family trust is to put someone in control who is willing to follow your wishes.
YOUR WILL AND FAMILY TRUST You can decide in your Will, who will become the Trustee and the Appointor of the Family Trust. You cannot decide in your Will who gets what assets from the Trust. Remember this is up to the Trustee. ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU
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