You might be wondering, “When should you set up family trust?” Is it when the kids are born, when they hit a certain age, or perhaps when retirement is on the horizon? Or, is it about the total assets you have?
As I help my clients navigate the intricate landscape of wealth preservation and tax optimization, it’s imperative to understand that the timing of establishing a family trust can be a game-changer for your assets.
The answer to “When to set up a family trust?” is more often than you might think. It’s about securing your legacy, protecting your assets, and ensuring that your hard-earned wealth stays where it belongs – in your family’s hands. Take a look at the video below, or read the transcript, to get a flavour of when you should be thinking about establishing that family trust.
Video Transcript: When should you set up a family trust?
So when do you typically want to set up a family trust?
I’m George Dube, saving the world from tax, one bow tie at a time.
Well, it’s not so much the age of your children, for example. Commonly I’ll be asked, well, should the children be born? Should they be whatever age that may be? Should I be a certain age or closer to retirement, for example?
My personal opinion is that yes, I want the family trust set up, in many cases, in all of those scenarios.
In terms of the size of the business or the assets, for example, here, it gets back to if as a very, very rough number, we’re going to lose 25% of our estate to Revenue Canada, when the second spouse passes away, or the first in other situations.
Well, at what point does 25% mean a lot to you? From a pure numbers’ perspective, 25% of a hundred grand may do the trick. We don’t typically see that for just a hundred grand, of course, but it doesn’t take a very big dollar figure for that 25% to mean something. Particularly when we consider what that future growth is going to look like for the business empire, the real estate empire, the investments that we’re putting together. Particularly if we’re going to benefit from some of the other reasons of setting up family trust.
So in terms of when to set up that family of trust, more frequently, it’s sooner than many people think. But something again to discuss with your advisor in your particular situation.
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Resources
For additional resources related to when to set up a family trust and why:
- Family trusts: Ultimate FAQ for real estate investors
- Family trusts for medical professionals: Saving taxes
More questions on when to set up a family trust?
Still have questions? I want to help you Do Wonderful Things™, so please contact me today.
Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.
