Hey all,
Just letting you in on a problem that I had recently with a lender and a possible out.
I have a family trust with a corporate trustee of which I am the sole diretor. When I applied for a loan with the lender they required my wife to go guarantor for the loan with her being an adut beneficiary. Talked to my solicitor and Mortgage broker and they suggested buying a discretionary trust which operates virtually identically to a family trust but I would not need my wifes signature. Sooo… Check it all out with your acct or solicitor but this is something that happened to me and it basically destroys the whole purpose of our structure in that my wife owns our home and I am the director of the company which owns the other homes but with her guarantee they can get at it all…….
Food for thought.Enjoy
Enjoy
AD [:0)]“Don’t dwell on reality; it will only keep you from greatness.”
-Rev. Randall R. McBride, Jr.Hey there AD,
Thanx for the info on discretionary trusts. Have they always been around? Was there any other differences that we should be aware off? i must check it out!!
Off the subject, have u had much experience in vendor financing (wrap) ventures? I am keen to learn!!
thank again
quote:
Everyone wants to go to heaven but nobody wants to die!!I’ve only done one Wrap to date Harry but I am planning another 6-8 this year. I feel that I have a reasonable understanding so fire away the questions. Don’t forget we have a few people here on site who have done well over 20 wraps.
Always open to chat about them.
Enjoy
[email protected]Enjoy
AD [:0)]“Don’t dwell on reality; it will only keep you from greatness.”
-Rev. Randall R. McBride, Jr.I was taught from day 1 that a discretionary trust under a company was always the wasy to go so that you achieved the maximum protection.
Don’t forget also about the land tax situation. If you’re getting up towards the land tax figure, start up discretionary trust #2, #3, #4 etc so there is no liability there.
Why pay more if not essential?
Topnotch
On The Sunshine Coast Of Queensland Where Our Bones Are Always WarmMy understanding is that a discretionary trust gives you much greater flexibility than a normal family trust. With a discretionary trust distributions allocations can be varied according to individual tax situations each year. With a family trust the benficiaries ownership/distribution ratios are generally fixed.
My understanding of this is that a Family Trust and a Discretionary Trust are one and the same. It is just that different people use different terminology which creates confusion with everybody. There is no difference between a FT and a DT because they both have the discretionary power to distribute money to whoever the Trustee decides upon, be it your immediate family or anyone else.
AD – Banks/Lenders will try to secure their borrowings any way they can and in your case they appear to have nailed you to the wall, just like they did to Hubby & I several years ago, before the days of single director company’s . To protect assets we had to create a separate Trust, transfer our home and pay the Govt Stamp – Oouch !! But in the long run it was worth every cent. We now own nothing in our own names and quite happy to sign Bank guarantees.
I have also heard that some people have been able to persuade Banks/Lenders that the wife doesn’t have to sign a guarantee if she owns all the personal assets of the marriage. I believe the sales pitch to the Bank was that as the wife had no input into the business of investments run by husband and although wife was named in the Trust as a beneficiary, it was the Trustee who decided who was to benefit by the distributions from the Trust.
Cheers to you all
Nessie
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