Forum Replies Created
- Originally posted by redwing:
Supposedly good in an Asset Protection scenario as well..?Not something I would do at all. A company could be sued and there is no CGT discount. This can be done through a trust.
LibraCharlie
A loss can’t be distributed but is carried forward until it is used (Tax credits). You can get the neg. gear effect in a Hybrid trust as lifeX has described. A hybrid trust is a cross between a unit trust and a discretionary trust.
You get a loan,
buy units in the trust,
trust buys house,
Just BrieflyHope this is what you are looking for
CATA
Asset Protection Specialist
[email protected]Originally posted by coastymike:Cata just one issue. A trust cannot be sued. It is the trustee of the trust that is sued in the case of litigation. That is why a corporate trustee is the preferred entity, with the company holding nothing more than issued capital (for two shareholders this would be $2 issued capital) and for greater security a sole director.
Hi Coasty
Yes you are correct,sorry a poor choice of words. This is the same way I set up a structure.
A good post though.Redwing
That is expensive for just a Hybrid Trust.
CATA
Asset Protection Specialist
[email protected]I agree with Terryw. The last beneficiary should be a company but only after every other option is exhausted.
CATA
Asset Protection Specialist
[email protected]I agree, but i would rather spend the money seeing the world. My car is a 93 nissan bluebird sss. Nice car to drive and comfortable. I have been close to trading up several times as I do like a number of more expensive cars, but then I take the family on another holiday. This has happened twice in 3 months.
Maybe next time
CATA
Asset Protection Specialist
[email protected]A trust has its own common and tax laws. The people who benefit from any distributions made by the trust can not be held liable for the actions of the trust. The trust owns the asset and because there is no shareholders, there is no ownership of the trust. Something that is not owned by anything else must be a separate entity(and therefor no-one can be sued for ownership of the trust)
CATA
Asset Protection Specialist
[email protected]Interesting.
The house would have to be held in either a unit trust(I would not do this) or a hybrid, with units held by another trust eg. discretionary or hybrid trust. I can’t see the benefit (you can have a company as a beneficiary and cap your tax at 30% in most cases)
What was the issue being discussed?[hmm]
CATA
Asset Protection Specialist
[email protected]Hi P_I
I would not agree with this either as it depends on the deeds and what you want them to do. Sometimes spending a little more will allow you to have more options in the future.
A unit trust IMOP is no good for asset protection as the units have a dollar value.CATA
Asset Protection Specialist
[email protected]Not a company and trust, just a trust. Charging $2500 – $3000 for just a trust is to much.
CATA
Asset Protection Specialist
[email protected]Originally posted by redwing:Individuals, partnerships and Companies are all legal entities a Trust I believe is not; all liability falls on the trustee, however, I’ve seen contrary information that says a Trust ‘is’ a legal entity?
A trust is a legal entity and if all requirements ae met, can live forever just like a company. Liability can fall on the trustee(hence the company trustee worth $2) as the trustee makes all decisions for the trust.
CATA
Asset Protection Specialist
[email protected]To buy units in the trust I think.
CATA
Asset Protection Specialist
[email protected]A trust can be sued but if you have different trusts for property, investments and business this limits liability. The combinations are limitless. Some people like one investment per trust. I know of aprox 60 for one couple.
CATA
Asset Protection Specialist
[email protected]A different company trustee will keep the investments completely seperate and unrelated. I believe this to be the best.
I have heard of a trust being sued, then trying to get through the company trustee, into a different trust. Unsuccessful I believe but will be tried again one day.
Maybe 2-5 trusts per company, it is really up to your personal comfort level.
CATA
Asset Protection Specialist
[email protected]Hi Herselman
I think the question isn’t financing through a HDT but one for a finance broker. I do not understand why your wife being guarantor is a problem.
I see the problem not in the trust but with the lender.
Maybe a broker can help.
CATA
Asset Protection Specialist
[email protected]Hi Lupus
If you give someone(or company or trust) something, is it yours anymore?
And if there is a legal document to back you, who can argue? Unless it happened after the litigation process has begun.There is a “6/24 month bankruptcy law” which means that the trust can be broken into in the first 6 mths and possibly broken into in the next 24mths, depending on what you are being sued for. Different circumstances will cause different outcomes eg.something illegal is not good.
If you are trying to hide assets from a current litigation, probably. If you are gifting the funds incase of future litigation but there is no “Smoke” then it should be ok.
Redwing
If you own units in a HDT,that could be seen as an asset in your name, therefor is an asset possibly worth sueing for.
I would not use anyone else but myself or partner as the appointer as I want full control of my trust. I have heard or people using someone else as appointer and loosing all that is in the trust.
Units are issued with a minutes entry in the trust deed. Wording is important though.
Hope this helps
CATA
Asset Protection Specialist
[email protected]This is one way to do it in a Hybrid Trust, Redwing.
But remember that if you own units in a Hybrid trust that is an asset that you could be clawed back.As you know, I prefer a discretionary trust for myself ( also, a hybrid trust that has not issued any units is treated like a discretionary trust until it does issue units)
CATA
Asset Protection Specialist
[email protected]Every partnership I deal with of more than 2 Directors or partners I find that sooner or later they have disagreements about which direction to take, usually resulting in a breakdown in the company or partnership.
Make sure you all want to go in the same direction.
That said, I would consider a Partnership of trusts. This way you could make a group decision while keeping each individual investment seperate.
Not my area of speciality though as I like to keep away from large groups for reasons stated above.
Good luck
CATA
Asset Protection Specialist
[email protected]Originally posted by lupus1704:Now, if say I had a trust and had to contribute $ 20K as deposit for a property into the trust, when it comes down to litigation, how does the law view my initial contribution to said trust? Is it still my asset, even though I have contributed it to the trust? Or is it considered a contribution and no longer mine to be attacked?
lupus
Hi Lupus
A “Deed of love gift” will allow you to gift the funds to the trust. Easy and cheap to do. If the funds are no longer yours they can not be clawed back, but if they are loaned to the trust then it would be seen as an asset for you.
CATA
Asset Protection Specialist
[email protected]In addition, lets imagine that the trust is new, and does not have any financials to prove that it can service the loan on it’s own. I’m assuming that to get the loan I would have to go guarantor on the loan, is this correct?
The trustee has to be guarantor or if there is a company trustee then the director needs to be guarantor
Can a low doc loan be done this way, i.e. in the name of a trust but with me as guarantor?
I am not a broker but I can not see why not.
CATA
Asset Protection Specialist
[email protected]Hi carl_vic
As far as I am aware there is no impediment to a trust being a beneficiary
of another trust and vice-versa, provided the resultant distributions do not
breach the Rule against Perpetuities.CATA
Asset Protection Specialist
[email protected]J Enterprise Group is simply the business name, the entity is a trust- J Enterprises Trust. I buy the properties to renovate under J Enterprises Trust. Any ideas on how I should be structering it?
This is a very general question and difficult to answer with the info given.
Things to take into account are
– Reno and hold or sell?
-Keep long term investments seperate from short term(under 12 mths).
– Keep your business seperate from the IP’s.
– Company trustee is better.Some things to think about. As for the rest I can not help you.
Hope this helps
CATA
Asset Protection Specialist
[email protected]
