Having a Family trust for your small business protects your interests, especially in company ownership. Here are four reasons why you should consider this for your business.

  1. Asset Protection

If the shares are in a trust, the asset of the company is separated from your personal assets. This protects your personal assets against lawsuits or claims of your company.   And this protects your company if you ever file for bankruptcy.

  1. Provides Tax Advantages

Family trusts distribute the income among family members. It can provide tax advantages for members with lower marginal personal tax rates. This is the perfect structure to benefit from a lower company tax rate and, at the same time, be flexible when it comes to income distributions.

  1. Facilitates Succession Planning

With a family trust, succession planning will be in place, and there will be a smooth transition of ownership in case you retire or pass away. This can avoid family conflicts, and the next generations are ensured a clear path when it is time for them to take over the business.

  1. Enhances Privacy and Control

As shares are held in a trust, the ownership details are only available privately. This protects your privacy and prevents unwanted attention. Also, the trustee has control over the shares and can decide about business ownership because the trust is a separate legal entity.

 Conclusion

Establishing a family trust will help you a lot in different ways. This type of trust will provide you peace of mind because of the privacy it offers and possible tax advantages. Also, if an unexpected event happens, you are ensured that your assets and family are protected. If you are ready to setup one, please feel free to send us an email.

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Should you require any additional assistance please don’t hesitate to contact us.

Posted on 07-Jul-2023