Australian Finance Podcast Family trusts: smart strategy or overrated?
May 26, 2025
Deline Jacovides, an award-winning financial advisor and founder of Mazi Wealth, shares her expertise on discretionary family trusts. She explains their function in Australia and when they might be beneficial. Deline debunks the myth that trusts are only for the wealthy, and discusses the real costs of setting one up. Listeners discover the nuances of investing in property versus shares within a trust, along with the tax advantages and misconceptions surrounding trust structures. Personal finance management is emphasized as vital in making informed decisions.
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How Discretionary Trusts Work
- A discretionary (family) trust separates legal ownership from beneficiaries and gives the trustee flexibility to allocate income and capital each year.
- This flexibility helps manage tax outcomes by distributing income to beneficiaries in lower tax brackets.
Plan Ahead Before Setting Up A Trust
- Think long term before setting up a trust and consider future savings and cashflow, not just current asset levels.
- Set up a trust early if you expect substantial growth to avoid triggering capital gains when transferring assets later.
When To Consider A Trust
- Use a trust when you need asset protection or intend to build intergenerational wealth and manage tax distributions.
- Consider trusts for tax-planning only if you can legitimately distribute income to lower-tax beneficiaries each year.