Hi,
I am starting out as a property investor and am currently in the process of refinancing my own house to use the equity to purchase my first investment property.
I have read a lot about starting investing in property and setting up a trust to make sure ones future assets are protected. I have a company which is currently dormant since me and my wife are both in paid employment through other employers but reading about trusts I am unsure what the best option would be for us to protect our future assets (Our focus is to invest in more then just property). Should we setup a trustfund through the company, or would we be better of going with a family trust.
Any advice or feedback is appreciated
Regards.
When you say a “trustfund” what do you mean??? There are no legal entites that are “trust funds”.
I would recommend you set up a trust and appoint your comany as the trustee, as this adds an extra layer of legal protection.
In regards to what type of trust (family, share, etc) to use, you have to expalin your strategy – will you be buying buy and holds or negativ;ly geared property, or even wraps.
Rgds.
Lucifer_auHi Lucifer_au,
Thanks for your reply. Yes I do mean a trust and not a trust fund.
I am looking to start with buy and hold, but will probably expand later down the track with wraps. One step at the time though.
Which trust would be the best to use having my company as the trustee?
Thanks
Hi there,
The best advice I could give is to dedicate about 2 hours in reading all the posts. Do a search on Trusts and you’ll get bucketloads of info on them.
Kind Regards,
George.“If You never never ask, you’ll never never know”
Armacaja,
It’s not an easy question to answer on a forum.
You really need to go talk to an experienced accountant and go through all your financials, your structure & your goals to establish which would be the right kind of trust structure for you.
Nick at http://www.strategicwealth.com.au (nased in Sydney) is an accountant who is expert at Trusts, but I can’t recommend you anyone in QLD.
Cheers,
Aceyducey
I would need to comment on the asset protection of trusts. My sister and friends are lawyers and I have extensive discussions regarding this.
Basically, trusts DO NOT protect you entirely or as extensively as the general public might think. Most of us will have ourselves as trustee and family members as beneficiaries; also in a company setup to get 30% income tax benefits etc. However, if you know you are getting sued and you decide to sack yourself ie. the trustee and reappoint another, the courts will know this obviously and may be regarded as a conspiracy. Although, theorectically not yours, the facilitation of the asset is case depended of course (reason of why you are getting sued).
Therefore, if the courts see fit, depending on your financial situation and your family etc. you can still easily lose your assets this way. So, trusts do not fully protect to the extent one might think, it is useful for tax purposes and facilitating income and outcome in multiple income streams, as in businesses or multiple portfolo properties+shares etc.Anyone disagrees or agrees, any thoughts
fjficm
Thanks for the info. It must be good to have a lawyer in the family!
I think the above would only apply if the trustee was being sued in relation to his/her role as trustee of the trust. If they were being sued personally, then surely all trust assets would be out of reach.
I have also heard that any transaction doen to defeat creditors could be undone by a court. eg you know you will go brankrupt and transfer assets to a trust beforehand (6 months?).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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