New Zealand Law
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Hi Welcome to JustAnswer. My first response will follow shortly. Please feel free to follow up if anything is not clear
Gift duty was abolished in 2011, and estate duty was abalished many years ago so there is no tax on this.
However if you are concerned about residential resthome fees in the near future, it takes many years to gift the property to a family trust.
The reason for this is that there are very strict limits on gifting in the 5 years period before the rest home fees are needed.
I am a young widow with young children no rest home issues are involved I want to protect this asset for my children
A family trust can be set up relatively easily, but I would only suggest doing this if you have good reasons for setting up a trust.
The asset is safe for your children without a trust unless you are going into business for yourself with financial risks.
Isn't asset protection for the family a good enough reason?? It is in NZ and I am concerned that you may be a US lawyer which I did not expect to recieve a reply from so you may not know our law in NZ?????
The asset is not so safe these days with friends/partners etc that can try and claim part of an asset these days
I am a New zealand lawyer born here and practising here. I just think trusts are often used without real understanding of the inflexibility that trusts can bring about, and the extra administration.
But again trusts are not completely safe from relationship property claims. the best way to protect the asset in that case is a contracting out agreement.
so how can I protect this small asset from future relationships if they turn sour and persons lay a claim?
Using a contracting out agreement is the best and safest.
I believe a contracing out agreement is something that happens once you are in a realtionship and at that stage sometimes emotions get in the way and one does not want to use that agreement????
You can enter an agreement at any time.
so can you enter a contracing out agreement before you get into any type of realtionshiop???
You can enter this before the relationship becomes living together or serious. I agree it can be a little difficult to explain that you require this, but even with a trust a claim can be made under the Property Relationships Act.
If you really want a trust get an experienced lawyer and budget about $2000 to $3000. There are many trusts inadequately drafted and asministered so dont go for a budget version.
Wow!!! I didn't think that could happen, is there any other way I can place the asset in our names with no further party able to lay claim in any way what so ever??
The contracting out agreement is the most effective.
OK I'll Have to remember tha tin the future, thanks for your replies and patience
I dont want to sound negative, but trusts do have a continuing requirement for administration, and it can be inflexible and add extra costs when you buy and sell. But there are good reasons sometimes for having one, depending on your circumstances.
My parents took out a family trust some years ago and gifted each year untill the value of the asset was totally gifted therefore incurred solicitors fees every year, I thought because I am recently widowed and my deceased husband's share would not be due for gift duty it would save the time and cost but you mentioned earlier that nz does not have gift duty any more is that correct?? so the 2000 to 3000 would be a one off figure apart from future sale and purchase transactions is that correct???
I take on board what you say about it not being the best option and I would love to know if there are any other options apart from contracting out agreement?
I must add I am not thinking of entering any relationship but am just thinking of the future in many years to come
You can gift in one hit now. If you accept the administration and other costs, then you could combine the trust with a contracting out agreement, which would be as safe as you can get.
Thanks again, I think you've given me lots to think about. Sorry about questioning your ethnicity!!!!!! Bye and kind regards Sue