Trusts are some of the most favorable investment options for investors in any market. By principle, trusts are comprised of different kinds of investment portfolios, including stocks, cash, real estate bonds, and other kinds of money-equivalent investments. In Australia, there are different kinds of trusts that one can invest in. Due diligence before and during the investment duration is highly necessary to keep the profits flowing. Here is a guide to the different investment trusts in Australia.
Family Lineage Trusts
Family trusts involve investments that are designed to keep capital and assets along the family line. These kinds of investments are common with real estate properties and even private businesses, which engage in income-generating activities. Family trusts are passed on from one generation of children to another and are protected by the inheritance law from various unfortunate outcomes, including divorces, separations, and even bankruptcies.
Business trusts involve investments whereby a business is protected from losses, lawsuits, and other forms of unfortunate eventualities from employees, clients, as well as creditors. Business trusts are highly essential as they enable the investor to separate personal assets from business assets. This level of protection is highly necessary when ensuring the longevity of such investments along the family line. Business trusts are also particularly famous across Australia as they offer access to small business tax concessions where selling of the business exempts an individual from capital gains tax.
Discretionary Family Trusts
The discretionary family trust is one of the most common Australian forms of investment structures that run along family lines. Members of the family get to establish, manage, protect, and pass-on family-based assets and businesses from one generation to another. Discretionary family trusts are different from family lineage trusts as the capital gains can be channeled to other trustees at the discretion of any family member.
Unit trusts involve trusts whereby the beneficiaries have the option of dividing the ownership of the investment into simplified individual units. They are different from other kinds of Australian trusts as they give beneficiaries the option of holding absolute ownership of a given trust. The discretion to manage capital from a given trust is solely left to an individual owner.