Hi All
Firstly, this is a great site. Now then. Wife and I have found a listed property fit for rental that we would like to acquire in a discretionary trust with a corporate trustee (both of which are yet to be created). The wife is the breadwinner and has a risky job in terms of chances of being sued (hence the structure), and as for me, I have taken a year off work to study full time (less chances of being sued). When we create the trustee company, ideally I would prefer that Wife had zero corporate responsibilities (e.g. director, secretary) and was just 50% shareholder, purely for maximum asset protection/minimising director's liability. I would be the sole director, company secretary and public officer and remaining 50% shareholder. Seeing as I am not earning any income, any lender we approach will naturally warm to wife. So my question is, if wife is not made a Director (as above) in the trustee company, are the chances of obtaining finance with Wife going guarantor: i) affected, or ii) diminished, or iii) dashed.
Keep up all the good posts!
Hi,
Many lenders require all adult beneficiaries to guarantee the loan anyway so this might fly. Aletrenatively you might put both of you on as directors to start with then remove your wife as director after the loan settles. No doubt the lender would require a personal gaurantee from her anyway so they are covered.
Marty McDonald | Mortgage Experts
http://mortgageexpertsonline.com.au/
Phone MeAs Marty mentioned many lenders will require her to guarantee the loan even if she is a beneficiary so they are going to definately require her to be a party to the borrowing if her income is required to be used.
Loan could always be in the name of Pty Ltd ATF XYZ Family Trust & Mrs X.
Done a couple like that in the last week or so.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Since you are spouses the lenders will usually take both into consideration, even if one is not a director and as long as she has an 'interest' in the structure such as shareholder, beneficiary.
It is generally not a good idea to name too many people as beneficiaries directly as you may not want her to give a guarantee in the future and some lenders require all named beneficiaries to provide guarantees.
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'm fine with all the primary beneficiaries (just myself and wife) providing guarantees to the bank. I am more concerned about excluding my wife from becoming a director and the duties/responsibilities that come with that role AND still finding a bank to loan to the trustee company.
Just another thing, can I approach the conventional banks and credit unions for an investment home loan easily enough with this setup or is this likely to be put in the too hard basket? Maybe it's time we consult a competent broker.
Thanks everyone for your comments
I cant see any reason why your wife would need to be a Director as long as she is a co-borrower that would be acceptable.
All depend most of the big 4 lenders would probably not offer such a loan in the present climate under one of their packages so rate discount might be limited and you would be certainly up for some legal fees for the assessment of the Deed / Constitution.
Couple of other lenders that spring to mind that would have no issue do the deal as a normal home loan 6.98% and have no fees whatsover.
Horses for courses.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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