Trust Assets

A Trust must always have some assets in it. Initially the assets owned by your trust may be small, but these can be built up over time as your wealth accrues and the need to safeguard increases. Over time, it is common for a person's entire estate to be transferred to the Trust.

What Assets Should I Place In My Trust? 

Assets of any value can be transferred into your Trust. The question therefore will often be which assets do you want to protect? If an asset has a low financial value, but it means a lot to you you may wish to transfer that asset into your Trust. In most cases, however, you would look at the Asset and ask yourself whether its value will increase over time. If that is the case then obviously the Asset and its capital gain are worth protecting.  

Usually you would transfer assets such as your family home, rental properties, investment portfolios, term deposits, and similar assets into your trust. 

How are Trust Assets Acquired? 

There are three ways in which a trust will acquire its assets; via settlement by way of gift, by sale and debt back, or by direct acquisition. 


The most common method of the Trust acquiring ownership of the asset is on the settlement of the trust, whereby the settlor's of the trust will settle the assets they have into the trust. 

In order to settle property into a trust, it is a requirement for you to first have legal title to that property. It is common for a settlor to transfer the family home or other assets into the trust unless personal taxation reasons would prevent the settlor from doing so.  

Sale and Debt Back

Another common method is for the Trust to purchase the assets from the settlor, with a debt that is owing to the transferor of the assets (commonly, the settlor in a family trust context). 

Using a sale and debt back approach provides a couple of advantages. Firstly, it keeps the transfer of assets very clear as the sale agreement will disclose the price of the transfer along with how much is owing. Secondly, it also gives the settlor various options such as how much of the debt should be forgiven each year and this can be adapted to suit their needs and financial position. 

Direct Acquisition 

A Trust can also directly acquire an asset. In this situation, the trustees may use the cash the trust has, or obtain loans using the trust's assets to acquire additional property. This method will commonly be used where a trust has been established prior, and it is decided it will be best for the trust to acquire the asset rather than in an individuals name.

If you have any questions or would like advice on what assets you should transfer into your trust, please contact us and we will help you take care of your sanctuary!