If you want to help your parents out by setting up a trust, here is some advice from the experts:
• Talk to your parents
Explain how a trust can help both the giver and the recipient. Get them comfortable talking about money and being willing to reveal the necessary financial information.
• Talk to your partners
If you're not in business alone, reassure your stakeholders the trust will not negatively affect the business..
• Work out the numbers
Make sure that the tax savings outweigh the costs. Also consider whether a trust is worth it, depending on whether you want to hand over money regularly or irregularly.
• Think long term
Consider unborn babies, parents' deaths, business problems and other scenarios when setting up the terms of a trust.
• Review annually
Every year, usually when you do your taxes, reassess how much money you're moving through the trust and ensure it's beneficial for the business, you and your parents.
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