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How an MD Family Trust can benefit your family

MD Financial Management offers a product that could be available to those looking to invest funds and still provide tax-efficient financial support to their lower-income children or grandchildren.

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An MD Family Trust can help you achieve these three goals:

1. Tax reduction
Before your beneficiary reaches age 18, the person who lent the assets to the trust pays the tax on the interest and dividends earned from the investments in the trust, while capital gains tax is paid by the beneficiary at their tax bracket. The tax savings on capital gains could, therefore, be substantial. Once the beneficiary turns 18, the interest, dividends and capital gains are taxable to the beneficiary.

2. Control
The trustees, who could be you and others you appoint, decide how the assets held in the MD Family Trust are invested and when the beneficiary receives the assets.

3. Protection
The trust is a separate entity from you and the beneficiary. As such, assets in excess of the loan made to the trust and kept inside the trust enjoy an added layer of protection from creditors. From an overall risk management perspective, this type of trust can provide peace of mind because very few adverse events could put those assets in jeopardy.