Creating a family trust can provide the opportunity to build wealth through investments and tax minimisation, with the bonuses of simplifying the succession process, creating better protection of wealth, and providing greater flexibility than superannuation.
Keep in mind that there are many types of trusts, and a family trust is just one of them. Which one you choose depends on many factors such as the type of investment, whether you will require a loan, marriage status, and your susceptibility to being sued. The most common type of trust, though, is a discretionary trust, commonly known as a family trust.
Basically, a family trust is a vehicle to accumulate investments with the profits distributed in the most tax-effective way.
A family trust allows the trustee to use their discretion in distributing funds to the beneficiaries for tax purposes without necessarily paying the funds out, allowing profits to be retained and reinvested into the trust.
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