I was wondering if anyone knows this.
If a Fixed Unit Trust with 100 Units was to be set up With 4 Family Trusts owing 25 Units Each.
“Family Trust 1” with 1 Trustee 25 units
“Family Trust 2” with 1 Trustee 25 units
“Family Trust 3” with 1 Trustee 25 units
“Family Trust 4” with 2 Trustees 25 units
In the case of family Trust 4, does the names of both Trustees need to be on the deed, or is it sufficient to put just one trustees name.
Is it then a case of 25 units being held jointly by Trustee A and Trustee B of “Family Trust 4”
Thanking You
Best Regards
Trustees are the legal owners of the trust property so the trustee's name should go on title and all legal documents. If there are 2 trustees then both names should go on the documents.
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
Thank you.
So does that mean that Trustees of “Family Trust 4” will Hold the 25 Units as joint unit holders, and the 3 Trustees of the other 3 family trusts will hold them as sole unit holders.yep. its not 12.5 units each for the unit holders of trust 4. BEcause they are both trustees the own the 25 units on behalf of all the beneficairies of that trust.
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
Mr TerryW,
Thank You Very Much Indeed. I have had these questions unanswered for weeks::
Can you please check my example: Based on my scenario above. I have done a brief for one sole trustee family trust, and for the Family Trust with 2 Trustees
Here it goes:
Are any of the units to be held jointly by more than one unitholder? Yes
How many joint holdings will there be? 1
How many solely held holdings will there be? 3
Joint Unit Holder 1
Will the unit holder hold the units on trust for another individual or entity?
Yes
What is the name of the trust (or the name of the individual or entity) for which the unitholder holds the units? XYZ FAMILY TRUSTHow many joint holders are there (in this holding)? 2
Unit Holder 1
An individual Name John CITIZEN (Trustee No 1)
Unit Holder 2
Is the unit holder… An individual MARY CITIZEN (Trustee No 2)
What units are being applied for (by this holding)?
Fully Paid Units 25
Sole Unit Holder 1
Will the unit holder hold the units on trust for another individual or entity? Yes
Name of the trust for which the unitholder holds the units? ABC Family Trust
Is the sole unit holder… An individual : MR SMITH (Sole Trustee)
Units being applied for (by this holding)? 25
Looks like you maybe forming the trust by yourself. This can be unwise if you don't know what you are doing. If mistakes are made it can be extremely costly to rectify them.
Without seeing the whole thing I am not sure if the above is correct or incorrect.
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
I totally understand you sir, but I cannot afford to spend 1000’s of dollars on a lawyer.
If the above is correct, then there are only two other family trusts involved who have one trustees each and they hold the other 25 Units each.
It can be simple with information or complicated without information i guess.
All i want is 100 units split into four unit holders, with 25 units each. 4 trusts, 3 with 1 trustee each and one with 2 trustees.
I think i almost have all the information required.
If i can make sure that the post above is correct then i think i have got the info. Then i can go into law central or some other website and i will do it online
With the info i have, do i still have the chance of stuffing up ?
Thanking You
You can actually ring up lawcentral to get help with how to fill in the forms etc but they can't give you legal advice..
May i ask what you need the trust for? ie purchasing property or business? etc
Some things to consider:
If you will be purchasing property have you considered the implications of getting a loan? Guarantees – could be that all the unit holders may be required to give personal guarantees.
Also asset protection – or the lack of it. Unit holders could be liable for the trust's debt in some circumstances
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
Terryw makes some good points. Here you are setting up a complicated venture with 4 separate parties as owners of the units. What is the exit strategy if there is a disagreement etc, who are the trustees of the unit trust – is it some of the individuals or is it a company if so how are the directors of the company chosen.
If you can't afford some proper advice can you really afford to enter into this venture? You seem a bit like an investor who would decide to save $400 by not having a prepurcahse building inspection and running a greater risk of unknown contingencies.
Thank You.
I totally agree with you gentlemen. That is why I have not set it up yet, i am researching, reading and finding information. i have not and will not execute anything until i have the complete info hence no mistakes yet.
I will pay if the need arises, but not without understanding everything.
Answering Your Questions.
The Fixed unit trust is going to be 100% shareholder of a company, to be formed. The company does not and will not have major assets as such. Its kind of a service business.
The company will have 1 director, Unit Trust will have 1 Trustee.
The rest of the story is in my earlier posts.
Why not just have the company then. that would be safer too. Just allocate shares to be held by each family trust. One major downside, however is that companies don't get the 50% CGT reduction whereas trusts do. But if you are having a company as owner then the CGT won't be available to the unit trust as shareholder – or maybe you mean the company will be trustee of the unit trust?
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
Thanks. Would havIng the unit trust in between be any better, have any additional advantages? In terms of asset protection for assets held by the family trust
what do you mean by halving the unit trust?
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
The fixed unit trust I have been reffering to. It holds all the shares in the company and then 4 family trusts own 25 units each of the unit trust
Oh, you meant 'having' not halving.
There may be some advantages in having the unit trust – but I think nothing major.
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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