Friends With Money #252: Family trusts
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Family trusts explained: Tax flexibility, asset protection and who they're for
This week on The Friends With Money podcast, Money magazine's Ryan Johnson speaks with licensed Australian financial adviser and author Helen Baker to explain family trusts in plain English and challenge the idea they're only for the ultra-wealthy.
They break down how a family trust is its own entity, the roles of beneficiaries, trustees and the appointor (who holds ultimate power), and why separation of control matters for potential asset protection.
Helen clarifies that the trust owns the assets and beneficiaries generally have rights to income or capital distributions, not ownership, and discusses when a trust may be worth considering (often with significant funds, varying household incomes, or positive income/capital), how tax flexibility works via distributing income across beneficiaries, the need to distribute to avoid the trust being taxed at the top rate, costs to set up and run, risks of poor management, and why investment suitability and liquidity matter.
Episode timestamps
00:00 Family trusts explained
02:03 Trust roles breakdown
05:12 Who owns what
06:13 When trusts make sense
08:23 Tax flexibility in action
10:25 Your advisory team
11:57 Risks and penalties
12:56 Costs to run and unwind
14:55 Choosing investments
16:49 Who trusts are for
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