021 0229 7560 david@pilgrimfs.co.nz


A trust protects and preserves assets from claims for the beneficiaries to enjoy presently and in the future. The person creating the trust is a settlor who appoints trustees to manage it for the beneficiaries. A trust can last for a maximum of 80 years from inception. Once it is established, assets are gifted or sold to the trust. If the assets are sold (market value), and there are no funds; the settlor lends the money to the trust. To discharge this debt, the settlor gifts it.



  • Protection against creditors’ (professional or business financial) or relationship breakdowns
  • Avoid claims against estate as it cannot be contested in the same way as a gift under a will
  • Flexibility of tax treatment on income-earning assets for beneficiaries
  • Provide for dependants who are unable to manage the assets due to physical or other disabilities
  • Protect against income and asset test, and be prepared for the possibility of residential care subsidy
  • Maintaining confidentiality of interests
  • Control of assets by trustees for offspring to prevent squandering inheritance
  • Protect assets from relationship or matrimonial property claims and disputes


  • Costly if not set up and managed properly with the likelihood of it being classed a sham (assets do not belong to the trust)
  • Lose advantages if the trust is a sham defeating the purpose for which it was set up
  • Losses of control over assets as decisions are made by the trustees who must act according to the trust deed in the interests of its beneficiaries
  • Costly to set up and maintain, and could be expensive if beneficiaries sue the trust for breach of its provisions
  • Seek independent advice on relationship property before setting up and transferring assets to the trust

Challenged in court if the assets were transferred to avoid obligations to a spouse or potential creditors, in which case it can  be clawed back