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Hi Team,

To round out my email series on Financial Intelligence, I would like to briefly touch on Family Trusts, which are often  misunderstood and vilified as being complicated and dodgy. I have personally benefited from having a Family Trust for the majority of my adult life and will continue to do so into the future. 
 

The term family trust refers to a discretionary trust set up to hold a family’s assets or to conduct a family business.Generally, they are established for asset protection or tax purposes.
 

Some of the benefits of setting up a family trust include: 

• Asset protection – such as the ability to buy a house for a child to live in without ownership being forfeited because the ownership remains within the trust.
• Minimizing tax – trust distributions means lower incomes for tax purposes.
• Planning for retirement savings – the flexible structure of trusts presents an opportunity to accumulate wealth which can supplement superannuation savings.
• Flexibility to invest in property – unlike super, holding assets within a trust doesn’t have the same strict rules.
• Capital Gains Tax (CGT) – family trusts have CGT advantages compared to companies. This is because the 50 per cent discount factor on capital gains received for assets retained for at least a year applies to trusts but doesn’t apply to companies.

A Family Trust can have significant long term benefits, but they do come at a cost (up to a couple of thousand dollars each year), and all trusts must be set up and administered by an accountant.

Next week I will be rolling out a completely new email subject; "Team Work"
Each week I will explore topics that revolve around this subject, such as "Team Building, Team Purpose, Team Dynamics & Team Performance". In case you had not noticed, I already talk a lot about "The DDB Team", but I now intend to take this to a whole new level, because I firmly believe that residential building is a team sport. Therefore; for us to achieve our mission we must all know and understand everything about "Team Work", and we must make this an integral part of everything we do.

PS: See you all at the DDB Team Meeting this Friday.
Thanks for reading,
David.