🎙️ Podcast Summary: When Should You Set Up a Trust for Investing 🔑 Main Topic: When (and Why) to Set Up a Trust for Investing 🧠 Why Consider a Trust? Trusts are investment structures offering flexibility in income and capital gains distribution. Ideal for high-income earners (e.g., doctors, specialists, professionals) looking for tax planning and asset protection. 🏗️ What is a Trust? A legal structure with: An Appointor – key decision-maker. Trustees – control assets and distributions. Beneficiaries – receive income/capital. Types discussed: Family Discretionary Trusts – most flexible for distributing to family. Unit Trusts – better for business arrangements or shared investments. Testamentary Trusts – triggered by a will to manage inheritance with tax and protection benefits. 🔄 When Does a Trust Make Sense? High Free Cash Flow After maximizing superannuation contributions. Once debts (like home loans) are under control. Tax Efficiency Avoid personal high-income tax rates by distributing to lower-taxed beneficiaries or a “bucket company” (taxed at 25%). Estate & Inheritance Planning Assets can remain in trust, offering control and protection from creditors or relationship breakdowns. Investment Flexibility Trusts can invest in: shares, property, crypto, cash, etc.—unlike superannuation which has limitations. 📊 Hierarchy of Investment Planning Superannuation – max out concessional/non-concessional contributions (0% tax in pension phase). Debt Repayment – clear personal liabilities. Discretionary Trusts – for investment outside super, once super is full or not ideal due to access age. Bucket Company – helps when limited beneficiary options exist. ⚠️ Key Considerations & Risks Beneficiary Loan Accounts: Distributing income but not transferring funds creates a loan owed by the trust. These are accessible assets that can impact Centrelink eligibility or future benefits. Compliance Costs: Annual tax returns, financial statements – expect $2K–$5K per year in costs. Family Dynamics: Inheritance disputes or too many stakeholders can complicate trust management long-term. Impact on Government Benefits: Distributions can reduce eligibility for family tax benefits or pensions. 🧾 Testamentary Trusts: A Special Case Activated by a will. Provides asset protection from bankruptcy or litigation. Allows income to be taxed at adult rates even for minors. Optional—beneficiaries choose whether to set it up. ✅ Final Thoughts Trusts offer flexibility, tax minimization, and estate planning benefits—but with complexity and cost. Best suited for: High-income professionals Families with future inheritance goals Investors with significant free cash flow Always consult with an accountant or financial planner before setting one up. 📲 How to Get in Touch Website: Consorting Private Wealth