Forum Replies Created
Hi Coasty
You seem to have misunderstood what I meant. I am well awear that the trusts assets can still be taken.I also ust 2 seperate trusts for business, if the have enough assets to worry about. If not I like to keep costs down for my clients(different situations).
I hope this clears he water for you.
CATA
Asset Protection Specialist
[email protected]
If just buying shares, then no. Shares are not risky in the sense of the owner being sued,I have hear of it being done sucessfully terry. People can be sue happy.
CATA
Asset Protection Specialist
[email protected]Hi RAMK
A Company will give you very limited protection. I use a Discretionary Trust,some use Hybrid Trusts to get the negative gearing effect.
E-mail me if you want to talk about structures.
CATA
Asset Protection Specialist
[email protected]I believe the family law courts can and do look through ANY structure that is within Australia’s law.
CATA
Asset Protection Specialist
[email protected]As far as I am aware there is no problem, provided the resultant distributions do not
breach the Rule against Perpetuities.The rule against perpetuities is a rule against remoteness of vesting. If the rule is breached the distribution would fail.
The rule against perpetuities is a very complicated area of law.
CATA
Asset Protection Specialist
[email protected]Originally posted by tom1000000:Eg it is apparently better to have a company as a trustee, not yourself…. why is this so?
If a trust is controlled by a person as a trustee, even though that person does not own any part of the trust, if any lawsuits are taken out, The trustee(ie you) can be held accountable for the actoins of the trust and could be sued.
To get arround this problem, a $2 company is appointed trustee of the trust. Because the trustee company is a $2 company it is of little use to the litigants to sue the company. You are appointer Director of the trustee company. Therefor, in effect, you control the asset in the trust BUT DO NOT OWN THEM. All you own in this case is the $2 company.
CATA
Asset Protection Specialist
[email protected]How old are you?
Remember that you will not be able to get until you are 55(untill they change the law anyway)
CATA
Asset Protection Specialist
[email protected]Does that mean that as a trustee I can divert the income to a non unit holder?
The trust deeds that I use, Yes if the trustee wants to. You will have to check the deed of the trust you purchase as some differ.
would I still be allowed to claim the interest back on my tax return (as a unit holder?)
This comes back to what the money is used for. In your case, you invested in hybrid trust units, so yes. What the trust uses the money for is up to the trustee, not you(for your tax return)
CATA
Asset Protection Specialist
[email protected]Profit distribution is at the Absolute Discretion of the trustee in a hybrid trust.
CATA
Asset Protection Specialist
[email protected]Originally posted by I am the Richest man ever:(and cheap)
Ha Ha Ha Ha Sorry, I thaught it was funny
CATA
Asset Protection Specialist
[email protected]Originally posted by tlnsrq:I
1- Is it worth considering a Hybrid Trust for the purpose of investing in shares?
Yes
2- If I borrow money (100K) to buy units in the Hybrid trust (100 units) and the money is invested in property or shares, then ALL income produced have to be distributed back to me. Can somebody confirm that?
At the absolute discretion of the trustee
3- What happen when the value of the investment increase (say become 200K), will ALL income be distributed back to me as the units holder or can I distribute back only part of the income to myself which is proportianl to the original value of the units 100K? I have read some opinions that say that this is achievable so that the rest of the income can be distributed to low income beneficiaries.
At the absolute discretion of the trustee
4-When the investment is sold will capital gain be distributed to me (units holder) or can it be distributed to other low income beneficiaries.
At the absolute discretion of the trustee
5- what happen when the investment become positive geared, (income exceed interest). How can I divert the excess income to other low income beneficiaries instead of having it directed to me as the unit holder.
At the absolute discretion of the trustee
6- When and how the actual income units get created, is it when I purchase an investment or is it at tax return time.
A minute entry for most deeds
7- Can I have overseas non resident relatives as beneficiaries and what would be the tax treatment then, as in how much witholding tax should the trust pay.
Trust pays no tax, beneficiaries pay tax where they are residents
8- For the type of investment I want to do, shares and property, is there any value of having a company as a trustee as opposed to me as a trustee
Yes Yes Yes
9- If I setup the trust with me as a trustee and appointer initially, can I change the trustee later to a company.
Yes
Should the company have to be created BEFORE the trust has been setup or can the company be created after the trust has been setup and then have it appointed as a trustee?
Better to do it at the same time
10- Should I move the family home to the trust from an estate planning perspective or is there some other structure that is better.
No, there is better options available
11- FInally does anybody have recommendations for an accountant in Sydney that can setup and maintain this structure.
Not that I know of.
I hope this helps
CATA
Asset Protection Specialist
[email protected]Why limit yourself to Sydney only?
I am in Brisbane and my accountant is in Melbourne.
And if you are going to an accountant for structures, ask them what is the difference between a family trust and discretionary trust?
Most will not know the diffirence(and I might be offending some accountants but I do not mean to) but accountants know accounting.Just my opinion
CATA
Asset Protection Specialist
[email protected]An offshore trustee can be done but will need an offshore trust and an offshore accountant also.
Offshore beneficiaries I can not see a problem. I have never done it and would need to look further before I did.
Intresting question.CATA
Asset Protection Specialist
[email protected]You can get a bathtub that is larger at one end, just for shower/baths. The one I have used was quite big. It also had a glass screen(not a curtain Dr X) and IMOP looked OK.
CATA
Asset Protection Specialist
[email protected]I would at least look into the possibility of using a company/trust structure as you would have a high turn over of what I call low end tenants, but there are other things to consider.
What is your business/profession?
What other assets you have?
Any other real estate?
And one I like to ask(some may not see the relevance) How do you cross the road?
A few things to think about.You should check with the local council for laws as I imagine each council is different.
CATA
Asset Protection Specialist
[email protected]Originally posted by Dr.X:My brother got in contact with the appointor and asked him to remove him (my brother) as trustee and appoint either a company or himself (the appointor). He said he would!
How can we check if he has or how can the trustee legally remove himself if the appontor objects?
Think about a company trustee with both partners as directors. If your brothers partner is appointer and trustee then he has absolute control of the trust and what is in it.
I don’t see why he can not resign as trustee.
CATA
Asset Protection Specialist
[email protected]Glad to be a help.
I am currently looking into the possiblity of changing appointers’. I will let you know what I find.CATA
Asset Protection Specialist
[email protected]Originally posted by Dr.X:It is a discretionary trust, without a corporate trustee. My brother IS the trustee of the trust!!!!!
I have not seen this before as all our trusts have company trustees.
I know the appointor can remove the trustee and appoint another trustee. This is what I dont like.
Also, what happens in the case of a legal dispute. Wouldnt the trustee be the first to get sued?
Why not have the appointer remove your brother as trustee and place a company as trustee?
Yes the trustee is liable, thats why most use a $2 company trustee(non trading company)
CATA
Asset Protection Specialist
[email protected]Hi Dr X
I will assume that there is a company trustee and he is the director.
From my understanding the trustee is responsible for what the trust does.From what I have read, your brother is possibly in the best position if the partnership goes sour.
Your brothers friend is the appointer who can only make suggestions to the trustee. The appointer can tell the trustee to wind up the trust and the trustee has to listen in this instance only.The trustee has absolute discretion in the dealings of the trust, and if the appointer tells him to dissolve the trust, it is still at the trustee’s discretion which beneficiary receives the money.
Hope this helps.
Is there a company trustee?
What type of trust?
What is the trust dealing with?CATA
Asset Protection Specialist
[email protected]Agreed terry, possibly a hybrid trust.
CATA
Asset Protection Specialist
[email protected]
If just buying shares, then no. Shares are not risky in the sense of the owner being sued,
