Protecting the Family’s Interests

Protect your family interests
My father runs a very successful company and as he nears retirement I am to take over the running of the business with profits going into a trust to be shared by the family. However, given that I will be taking over the company, can I be the beneficiary of the trust or must I be the trustee? And does my standing with regards to the trust affect my children and their entitlement to be beneficiaries?
As your father’s successor, you can still be a trustee of the family trust. You can also still be a beneficiary. However, to avoid a potential conflict of interests, there ought to be other trustees appointed to act with you who are neither officers of the company, or potential beneficiaries of the trusts.
This will also help to protect your children’s interests if they are included as beneficiaries. One of the main advantages of using a trust structure to hold family company shares is that the trustees will be the legal owners.
This means that the trustees can exercise the shareholder rights on behalf of the beneficiaries, making it much easier to retain control of management of the company. Depending upon the nature of the company and its business there are also a number of tax reliefs available, allowing your father to pass on shares tax efficiently. Your legal adviser should work with your accountants and financial advisers to achieve this.