I want to set up a trust fund for a child or invest in a managed fund for them in Australia - how do I do it?

Answer 1

First things first - Be very careful of any advice you take from Yahoo Answers. Most of the users are from the US so some answerers might not give you answers that are relevant to Australia. I'm from SYdney, Australia and work in the Financial Services Industry.

The first step you should take is to speak with a financial planner.

I'm not sure what the reasons you wish to invest for your child are, how old your child is, how much you plan on investing, and how long you expect the investment to be for. A financial planner would look at all of these factors and point you towards the product that would best fit your situation. Without this information (and no doubt more) nobody would be able to give you any accurate financial advice on this matter.

A managed fund is probably cheaper (depending on the amount of money you are investing) but wouldnt allow you as much control over investments (e.g. you couldn't invest in specific share options).

A Trust would offer greater control over investments, but it could require a lot more time and effort on your behalf.

If you wanted to control when and how your child could access the funds, you would probably need a trust. Then again, you could always invest in the mutual fund via a trust.

The choice of which managed fund, or which trust structure suits your needs can be quite complex. Different approaches will result in different taxation rules - many financial planners, particularly if reccommending a trust be set up, will no doubt refer you to a tax agent or accountant for the finer details of taxation.

If you were to go down the Trust path, then you would more than likely need to meet with a solicitor to draw up a Trust Deed. A trust deed is a legal document which sets out the rules relating to the trust and how it operates. There may be 'off-the-shelf' versions of these available but I am not aware of any.

Also, regardless of whether a trust is created or a managed fund set up, the financial planner would help you establish an investmet strategy and asset allocation based on your risk/return profile (the returns you are wanting, and the risks you would be willing to accept to try and achieve those returns).

Investing, even at its simplest, can be confusing, when you consider the underlying legal requirements, the huge number of different products available in the market, and the impacts that your decisions could have on other ares of your (or your chiilds) finances. A financial planner, having an overall knowledge, will be able to guide you through this with ease.

Cheers,
Richard

Answer 2

Speak to your accountant in Australia. They will be able to set up a trust for you. You will be the trustee of the trust so you can make all the decisions and control what happens to the funds you place in the trust. Your child will be a listed beneficiary of the trust so any income, profits, or money that is distributed from the trust will be distributed to them and they will pay any applicable tax on it. (no tax on anything up to about $772 for income not from employment if they are under 16 or 18) If you do not want the child to receive any money until they are a certain age, then you do not have to distribute the income etc received and it can stay in the trust, but as trustee you will have to pay the tax on the income received by the trust.

Your accountant will be able to advise the best method and assist with the legal side of things.

Answer 3

In these a/c the money will remain invested for at least 16 years and any interest or dividends will be tax free. I therefore recommend investing it in high some yielding, high quality shares, especially if you can top it up to the maximum. This of course involves some risk and if you are the nervous type, invest it instead in a high interest building soc. Child Fund. If the interest rate averages at 6%, in 18 years, that £250 will become 714 and if you add another £250 every year it will become £8,190.

Answer 4

Go call up a mutual fund company and they will send you the paperwork.

Answer 5

Call your Swiss Private Banker and he will take care of everything.