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Thats quite unethical. To start with I dont think you are supposed to be friends with your accountant in order to acheive altererior
motives like taking control of a trust. Totally unprofessional. But it is the perfect example its not what you know but who!
Bart is not really supposed to know that GF and GM have died, but just happened to know as they were his friends!Okay, so lets pretend im a trustee then my role is to look at a property portfolio and decide how income is to be paid to beneficiaries. Appointer assigns a job to me and could fire me if he/she wanted. if the apointer happens to be one of the beneficiaries then it can assign someone to be a trustee but cannot directly control how beneficiaries are paid.
But yet the appointer is in control of the assets of the trust and how they are distributed to beneficiaries?
Complex, how do they do that if they are not able to direct the trustee and only appoint (Give job)."A director is not part of the trust, but part of the company which may be the trustee of the trust"
I think my grandfathers company is the trustee and my grandfather is the director. The current and future appointers I have no idea. For a while I was thinking that the directors role was to direct the trustee on how to distrubute income. But that would be the appointer, hense why I asked you to contrast the roles to help me understand.
Or, alternatively, if I cant get away with that I may be able to convince the family to create dad as the next appointer with me as the next appointer after him. So when dad passes I become the next appointer and ultimately the control of assets are passed to me.
Hang on, if I was able to become appointer, I would be able to distribute income to both myself and my father by instructing the trustee. Additionally If I was the appointer the trust assets would be safe from attack from the new wife with the eventual passing of my father. right?
Also how would you compare the role of the director and the appointer?
Yep, I understand. Offcourse everyone would want to be the appointer. lol. The appointer is control of the whole trust including all its assets and ultimately how they are distributed via the trustee. My goal is to make my father the appointer as I eventually want to create a special disability trust as I actually have a disability. They are quite a new thing, heard of them?
Stephen
Terryw wrote:Yes, you can amend the deed. Or have your grandfather's lawyer do it as you must be careful not to cause a resettlement.In which case who would be a suitable candidate for the next appointer? Could I or my father become the next appointer?
Or alternatively, how may I take control of the appointer?
Terryw,
Once I find out who the appointer is, is there any way I may be able to change who is to become the next appointer in the trust deed?
Terryw wrote:It doesn't matter who the trustee is, the assets of the trust won't become part of the estate – generally. (In NSW there is the notional estate orders where trust assets could be taken to be part of the estate. There is also the possibility that the laws in ACT will change in the future, and there is also the possibility that the claim could be commenced in NSW if the property is located in NSW).What you need to look for in the deed is who the appointor is, and who the next appointor is. This is important, very important. There is also the possiblity for the loss of capacity in the future. You don't want someone hostile taking control of the trust and distirbuting all the trust assets to themselves.
The trust deed should say who the appointor (could also be called guardian) is and who the trustee is. You will also know if it is a unit trust or a discretionary trust.
Okay, well I will find out who the appointer is and the next appointer. From my reading I determined that the appointer is the person who is able to replace the trustee in the event of a dispute
Sorry to bother you again. Say in the future my grandfather passes and the trustee becomes under the control of my father.
Then in the future when my father passes I become in control of trustee and how income is distributed. Correct?Thats so long as I make sure dad details in his will that I am to become in control of the trustee and its relevant wealth.
Thanks
I think I understand now. Thanks
"Or he himself could be the trustee of the trust"
All this is in order to get information about the trust so I may determine how the inheritance falls into my fathers hands
in order to prevent it from being creadited by my fathers new wife.If i ask him and he understands and tells me about the structure of the trust and about the trust deed. Then I have no need to
talk to the solicitor. Otherwise I should make an appointment with solicitor.I found a model trust deed on google. The trust deed would detail the details of who is the trustee?
Additionally it would provide a detailed description of the type of trust and the conditions of the trust?Terryw wrote:nope. Unlikely.The trustee controls the trust and determines the distribution. It is likely your Grandfather will have a company as trustee with him controlling the company as director.
My grandfather did once tell me he is the director of his company while we were discussing this trust stuff. So my gradfather could be the trustee or a indivdual representing my grandfather for his company.
Terryw,
The solictor would be the trustee right?
Terryw wrote:Assets of a trust don't form part of a person's estate. So they cannot form part of the will. They will need to pass control of the trust on by having back up appointors to the trust and also making sure the shares of the trustee (if a company) are passed on via their will. But it is the appointor that controls the trust by hiring and firing the trustee so this is the important bit.Any personal assets they hold can be left in the will to a testamentary trust (a post death trust). Under the tax act ITAA 1936 any income received by a minor from a will or a testamentary trust is taxed at adult rates. That means a 2 year old kid could receive $16,000 pa tax from from a testamentary trust. This is a huge sum. Imagine an extended family with 10 kids!
Income from normal trusts set up during lifetime (inter vivos)are taxed at normal rates. For kids this means $3333 pa tax free for this year and this drops to $416pa from next year. over that they pay tax at penalty rates.
So you need to get your grandfather to produce his trust deed and then see what is in there concerning the appointors. it may need to be amended. If it hasn't been amended for a while you should get them to fix it up as there have been a lot of changes and the definition of income etc used in the deed will probably need to be changed too
Would the solicitor be able to produce a trust deed? I could make an appointment with the solicitor, I however am not sure how much information they are able to give me without my grandfathers presence. If i can get enough information to determine whether or not I require a change in order to prevent my grandfathers assets falling into the actual hands of my father as opposed to a family trust. I do know that the trust setup involves a company as I have heard them talking about that in the past.
Terryw wrote:an option is an agreement which gives you the right to buy something for an amount sometime in the future. It is a right and not an obligation.So if your dad's property is worth $1mil and he sells you an option to purchase it for $1,200,000 at any time within the next 10 years then you can buy it for this price no matter what the value is. eg after 9 years it may have doubled to $2mil, but you can get it for $1,200,000.
An option also gives you the right to lodge a caveat on the property. So it cannot be sold or further mortgaged.
This may give you some priority over others who also may have a claim on the property. Careful planning is needed as it could be undone in some cases such as if it is an artifical scheme used to defeat creditors.
[/quoteInteresting, are options free to create or do they cost? I dont fully see the value in them, I however am interested in purchasing some of his properties in the future. But im not sure options would be nessasary as I may just buy it then.
Terryw wrote:Sounds like large sums of money are involved. You will surely need professional advice.Your grandfather may be able to change his will (if he still has capacity etc) to incorporate a testamentary trust so that his assets don't fall into your father's hands which will make it harder for the new wife to make a claim on these. It will also be great for asset protection generally and tax savings. But you need to carefully consider what assets the grandfather has and consider any general tax, and land tax issues too.
Yes, ive tried explaining this trust stuff to him previously and he finds it hard to understand the ethics of the trust structure. The main problem has always been my grandmother who is in oposition of me becomming part of the family trust. There is a family trust in existance already. They never quite understood the concept of distributing income via the family trust. I really want to learn more about the testamentary trust as I soon may propose that to my grandfather. I think my fathers inheritance will be passed to him via the family trust, I however am not aware of the type of trust it is.
