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How to Complete Our Asset Protection Planning and Trust Questionnaire



Our instructions on how to complete the asset protection questionnaire.

As you will gather from the form unless your expert knows all about you they cannot tailor make an asset protection plan which will achieve your objectives. This involves not only a knowledge of your objectives, your assets and liabilities, but also a knowledge of your income and businesses.


Preparing an asset protection plan and trust involves far more than filling in a few names on a standard form trust deed. Advisors who prepare trust deeds instantly by simply filling in a few blanks are doing you a disservice, as such trust deeds are not worth the paper on which they are written.


The asset protection plan has to work in best case and worst case situations. You therefore have to plan for the best as well as for the worst, and an advisor cannot plan for the worst if they do know the risks which are of concern in your case.


Make sure that you do not attempt to plan for perfection. All that does is to put matters in your too hard basket as there is no such thing as perfection. What is important is that you put your present wishes on paper so that if you die or become incapacitated next week others know what those wishes are. If you change your mind you can change your wishes if your trust has been properly prepared.


In New Zealand do not forget that the Income Tax Act 1994 only permits you to obtain taxation benefits if they are purely incidental benefits accomplished as a result of an asset protection program set up for other purposes. It is accordingly important that in outlining your objectives for your adviser that no mention is made of incidental taxation benefits. Always take expert advice.


Guardians of your infant children:

Guardianship is the right to make important decisions about the upbringing child such as education. The person with custody of the child who looks after his or her day to day care.


Legally both parents of a child are his or her guardians. In New Zealand section 26 of the Care of Children Act 2004 permits the father or the mother of a child (including an unborn child) to appoint any person by their will or by deed to be a guardian of the child after his or her death.


Under section 16 of that Act:


"(1) The duties, powers, rights, and responsibilities of a guardian of a child include (without limitation) the guardian's


(a) having the role of providing day-to-day care for the child (however, under section 26(5), no testamentary guardian of a child has that role just because of an appointment under section 26); and


(b) contributing to the child's intellectual, emotional, physical, social, cultural, and other personal development; and


(c) determining for or with the child, or helping the child to determine, questions about important matters affecting the child.


(2) Important matters affecting the child include (without limitation)


(a) the child's name (and any changes to it); and


(b) changes to the child's place of residence (including, without limitation, changes of that kind arising from travel by the child) that may affect the child's relationship with his or her parents and guardians; and


(c) medical treatment for the child (if that medical treatment is not routine in nature); and


(d) where, and how, the child is to be educated; and


(e) the child's culture, language, and religious denomination and practice.


Life Support:

Some jurisdictions (such as some of the States in the United States) permit you to make determinations as to whether the life support system that you are connected to should be turned off, to decline specified medical treatment, and provide for the document which needs to be completed when expressing such wishes.


In Australia, New Zealand and the United Kingdom there is no specific legal provision dealing with disconnection of life support systems. Your wishes as to the disconnection of life support systems have no legal force in those countries, but can be shown by your loved ones to the doctor to take into account when making such decisions if they are legally possible.


Your wishes as to your funeral:

You can in addition include wishes as to where you are to be buried, or where and how your ashes are to be scattered. Some people like to detail the funeral service which they wish to have, and music to be played. Some even provide for a party after the funeral.


Your wishes as to organ donation:

If you are an organ donor which organs do you wish to be donated on your death:


Any needed organs, tissues, or parts;


Any needed organs, tissues, or parts except my (insert body parts not to be donated):


The following organs, tissues, or parts only (insert organs to be donated).


If yes for what purpose are the organs to be donated? (Select one of the following choices):

  • Any purpose authorised by law;
  • The following purposes: (select one of the following choices) transplantation.
  • Research.
  • Therapy.
  • Education.


 

 

 

Do you wish your organs, tissues, or parts to be given, if possible, to relatives of yours in the first instance, and if not possible to any other person?


Name of the Trust:

You can have any name you wish. You have to remember it. My recommendation is that you use your own names unless there is a special name you really want for sentimental reasons. The name gives no secrecy as everyone with whom the trust deals will know who the trustees are.


Trustees of the trust during your lifetime:

In essence the trustees must be the people who are genuinely making the decision. Do not appoint anyone who merely acts as a rubber stamp. To do so will both damage credibility and probably result in the trust or the trust's transactions being invalid. A trust or a trust transaction which is not genuine may be a sham i.e. a pretence and invalid for the reasons detailed in Ross Holmes' book "Sham Trusts".


The trustees of the trust will normally be yourself and any other person whom you wish to involve at that time to look after your important property decisions, and to carry out your wishes as to the distribution of the trust's assets.


Trustees of will and trustees of the trust after your death or mental incapacity

After your death the trustees of your trust and the trustees of your will should always be the same for consistency. They are the people whom you trust to look after your important property decisions, and to carry out your wishes as to the distribution of your assets.


For those of you who are single who is to look after your assets if you become incapacitated or die? If that person is dead or incapacitated, who is to take over as the replacement?


For those of you who are couples your partner can be the sole trustee if this is what you wish. If your partner is dead or incapacitated, who is to take over as the replacement?


If you and any partner have died and you have children, are they old enough and responsible enough to be the backstop trustees? If the answer is yes, they should be appointed.


If the answer is no and the children are old enough they could be appointed together with someone whom you consider responsible enough so that they can be involved in the decisions and not feel left out. Unless the law provides a minimum age for the appointment of trustees, trustees must be old enough to legally enter into contracts. This age varies from country to country and state to state. In New Zealand it is 20. Our trusts provide that decisions of trustees must be unanimous. The children cannot outvote the other trustee. They all have to say yes.


Property attorneys after your incapacity

In some Australian States and in New Zealand it is possible to prepare what is known as an enduring power of attorney as to property. It is similar to a normal power of attorney in that it gives people to right to sign documents on your behalf in relation to all of your property or specified parts of your property (but not the trust's assets which are no longer yours and are dealt with by the trustees of the trust). It can be used after you become mentally incapacitated. That is why it is called "enduring". In some jurisdictions (such as New Zealand) an enduring power of attorney can be used as well while you have your mental faculties if it says so.


Such property attorneys (depending upon the law in your country) can be appointed to act jointly and severally i.e. any one of them, or one followed by another. You can provide for backstop property attorneys, and need to detail the batting order in which they are to be appointed. If the backstops are children, will they get their noses out if they are named out of age order?


Welfare attorneys to look after your welfare if you are incapacitated

In some Australian States and in New Zealand it is possible to prepare what is known as an enduring power of attorney as to welfare. It gives people to right to make welfare type decisions on your behalf (such as health care decisions and admission to hospital) if you become mentally incapacitated. Welfare attorneys need to be humane.


In New Zealand only one person at a time can be a welfare attorney. You can however provide for backstop welfare attorneys, and need to detail the batting order in which they are to be appointed. Once again if the backstops are children, will they get their noses out if they are named out of age order?


Your beneficiaries

Who do you want to benefit on your death?


If they are not alive then who is the backstop?


At what age and in what form do you want them to benefit?


Do you want them to inherit a trust with assets in it, rather than inheriting assets personally? This is my recommendation as in this way the assets are 100% safe from attacks by others.


In the case of older people what is going to happen to the assets if they inherit them personally? Is it not better for the assets to remain in the trust with the "older" people being paid out money as they require it, so that what is in the trust is never theirs? In that way it cannot be taken from them.


Success through updating your objectives

After completing your asset protection plan, if your objectives or circumstances change it is essential that your asset protection planning documents are updated to reflect such changes. If they are not they will not achieve your objectives.


If the law changes in a way which affects your asset protection plan your asset protection planning documents must be amended to cover or protect against such changes. Your advisor must make a commitment to inform you whenever this is necessary. One of the few places you can obtain details of law changes and their effects on asset protection plans is the news page of this web site.

 
 

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