Setting up a family trust, for a lot of reasons, can be quite confusing at first.
Of course, how can you make the right decisions if you do not understand what you are getting yourself into, right? If in any case, you need to hire a family trust lawyer, it is important that you fully comprehend the situation, especially since legal documents are involved.
Below are the terms you will likely encounter when dealing with a family trust.
- Advisory Trustee – The advisory trustee has the right to attend all meetings and participate in the decision-making process, but he or she does not have the legal duties and responsibilities of a trustee. He or she gains appointment for the purpose of providing counsel, oftentimes only for a specific time frame and due to being an expert in a specific field.
- Board of Trustees – The board requires a minimum of at least two trustees, but more often than not, there are four, including the elected Chairman.
- Chairman – He or she, via election, is the presiding trustee and usually has a casting vote.
- Charitable Trust – Defined within the Charitable Trusts Act 1957, this serves religious or educational purposes.
- Emeritus Trustee – For considerable contribution, an emeritus trustee is an honorary position that intends to facilitate interest and a level of engagement, as well as support, beyond a board member’s formal tenure.
- Executive Trustee – He or she is a trustee with an executive position, such as a school principal or a company CEO.
- Independent Trustee – An independent trustee cannot be a settlor or a beneficiary of the trust. This also involves non-affiliation, association, relationship, control or influence to and/or with any of the parties carrying a beneficial interest in the trust. He or she serves to provide validation to private or family trusts, a usual requirement for a Deed for Superannuation, as well as varieties of Managed Fund Trusts.
In learning legalese, you can read overviews online, with the New Zealand government providing easy to digest explanations of laws such as the Trustee Act 1956.
A family trust, amongst other legal things, carries just as much weight. So, before you agree to and sign any legally binding document, it is a must for you to know the concepts and language of this field of law.