Hi Guys,
Have just been going through wealthguardian and have a quick question.
Say I have some properties owned as an invidual and I want to start using the Complete Asset Protection Model.
Do I need to restructure my existing assets for the trust access the equity held as an individual?
Or can I somehow transfer that equity to the new entity. Which would be generally preferred?Obviously this would be best answered by a financial advisor, but I would just like to get an idea if possible!
thanks,
Ben C
Hi Ben
I am not really sure what you mean. If you have equity as an individual, then the trust could borrow funds from you, or even use those assets as security.
If you are concerned about asset protection, then you cannot really just trasnfer the equity into your trust without selling the property to the trust. But you could let the trust take a 2nd mortgage over the property. So if you were ever sued, the trust would be owed the remaining equity and this may be out of reach of creditors if done correctly.
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
Hi Terry,
Thanks for answering…
I will explain the scenario a little better.I have just set up a trust and corporate trustee, but I have no investment capital. All I have is some equity in a property owned as an individual.
I find a property I want the trust to buy using that equity.
How would I go about this?>If you have equity as an individual, then the trust could >borrow funds from you, or even use those assets as security.
Not quite sure how this would work since the equity is tied up in my mortgage as an individual. How can I lend it to anyone since it’s only realised upon refinancing the loan? Do I need the lender’s co-operation to make this work?
Do I need the lender’s co-operation for the trust to take out a 2nd mortgage?
Hi Banderos
You can increase your existing loan and then withdraw the funds as needed and lend them to your trust (have a written loan agreement).
Or you could use your existing property as additional security for the property you are buying in the name of the trust.
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
Hi Terry
So, for option 1 above I would need some kind of redraw facility? My equity is tied up in a no frills mortgage without this.
For option 2 when you saw ‘additional security’ is it possible to use the equity to cover all purchase costs including the deposit?
Hi Banderos
With option one, you would have to apply for an increase in this loan. Getting a separte split with a redraw facility wouldn’t be a bad idea.
You could use your existing security to cover the deposit and the purchase costs, but this would be cross collateralising and make it messy for future purchases.
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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