Hi, my question is about whether or not I should be a trustee of a friend's trust?My friend Mary 64 yrs old, lived in NZ, NZ citizen. She sold her property last week. The property was under her family trust where she, her 2 sons are trustees in the trust. Both her sons are working in Australia. She worried that her sons will be charged captial gain tax in Australia as the property sold in profit. She plans to retire 2 sons from her trust now. She will keep capital gain in trust(not divide to her sons straight away to avoid tax) and buy another property for herself within a year in NZ.Now, Mary asks me to be her trustee as she wants me to manage her trust. Such as signing documents, looking after accounts etc. I assume she wants me to be as a professional trustee whom have limit liabity to her trust. I am not sure whether or not I should be her trustee. I don't want to worry too much about her family issues. I don't want to be involved with something I don't know. I just one of her closer friends. Would you please advise me what I should do?
I told Mary that I will think about it. I want to help friends while I don't want to have trouble or headache later as Mary are nearly 65 years old. I assume she wants me to look after her as a mum if I can. Not sure.
Hi Welcome to JustAnswer. My first response will follow shortly. Please feel free to follow up if anything is not clear
If the trust is in New Zealand then it will pay tax in New Zealand. Normally if this is a residential property used by the trust for residence of the trustees/beneficiaries as a home the profit would not attract tax. But that is not always the case and she needs to take some tax advice from her accountant.
You are right to be cautious however because she could easily appoint a trustee company or her lawyer or accountant to do this. If you are to do this as a professional trustee, and get paid, this also attracts liability if you make mistakes or are negligent in running the trust-I am not saying you will be of course but if the beneficiaries think so, then they could sue. So unless you have a family connection I would not advise doing so. I am not sure your friend is getting good tax advice about this however, as I cannot see how the sons would have to pay tax on this. But then I cannot comment on Australian tax law, but see the need for advice
ok. Very good. Thank you very much.
LLB MMgt FAMINZ 32 years qualified as lawyer
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