There is an option outside super for protecting and sharing wealth.
With wide-ranging changes to super taking effect on July 1, it is worth considering whether it’s time to put your non-super money into a family trust. A trust can tax-effectively distribute wealth among family members, protect your assets from creditors and help with succession planning.
Annual concessional super contributions will be capped at $25,000 from July and, for a wealthier retiree, the maximum that can be held in super will be $1.6 million. Family trusts are one of the few tax-effective vehicles other than super. “Family trusts are going to exponentially grow again,” says Peter Bobbin, managing principal of Argyle Lawyers.
Here are some key questions and answers about family trusts.
How many are there?
In 2014 there were 802,645, according to the tax office. Around 20,000 are set up every year, so Bobbin estimates there are 850,000 now.
How much do they hold?
$344 billion.
How much money do you need to set one up?
Just as self-managed super funds have a minimum recommended amount of around $250,000 to justify the annual costs, a family trust needs at least a similar amount to make it worthwhile. It needs to pay accounting fees and lodge tax returns.
Is there a maximum contribution amount?
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