Sue Trust or trustee

The consultant is incorrect.

One advantage of a discretionary trust owning assets, or conducting a business, is that no one beneficiary has any claim to the assets of the trust. It is the trustee of the trust that is sued not the trust itself.

There are a lot of these so called “asset protection specialists” running around town predicting that the end of the world is nigh lest you establish a discretionary trust. A lot of these consultants have qualifications in other areas such as optometry, mortgage broking, etc and have no formal qualifications in law, accounting, economics, business administration or other commerce related discipline. They go to a few courses, get given a bunch of manuals to rote learn and then sell a few products. Many of them have no understanding of the principles behind the concepts and end up providing poor advice. I think asset protection consultants have almost become the new property spruiker for the naughties.

I would ask your asset protection specialist what tertiary qualifications they have in either law or accounting or business admin. I wouldnt be surprised if they have a major in a totally different discipline.

Redwing,

What amazes me is that some people are making recommendations to people to quickly setup a trust and move their one IP to the trust in case they get sued.

When you talk to these people they are working in an extremely low risk industry (usually an employee for a major corporate), have one investment property, basically have no equity and are worth under $1M. I mean its crazy to transfer an existing IP into a trust and incur the stamp duty and possible CGT if your chance of being sued is negligble.

But then they are told that you could be out mowing the lawn and a rock hits someone in the eye and they sue you for $20M. What then. Well if you have a net asset base of $200K then the chances of them getting $20M are pretty slim. So your $200K is a risk. Sure but life is about assessing risk and the costs of mitigating that risk. If you insured against everything single risk in life then your insurances would be astronomical.

I actually had a client tell me once that his insurance policy against anyone making a claim on his assets was a russian associate who would ensure that the claimant wouldnt have a tongue or fingers so speaking or writing down the claim would be impossible. I conceded that in that case his asset protection was probably pretty good.

Seriously its about risk management, risk mitigation and assesing the costs vs benefits. Unfortunately fear is a powerful tool and has been used many times to sell many types of products.

Even though it is clearly not a pre-requisite to become an asset protection specialist, what kind of benefits do you think they bring to the job? I only ask because a lot of people say to steer clear of solicitors or accountants for asset protection advice.

As for a russian associate, they seem v. handy. Are they cost-effective? [ohno]

Munjy

I have had many negative comments from people that have been told that they need Asset Protection when they clearly do not. Being one of these “Asset Protection Specialists” I feel that some others are possibly in it for the wrong reasons, which makes me feel as if I am being draged down also.

Having said that, I believe that the trust deeds we use are some of the best around. We also have a large group of solicitors and barristers that I turn to for all my legal advice.

The reason that I decided turn to Asset Protection is from a personal experience that almost cost me in excess of six figures. Not a nice position for anyone especially for a first time investor. The more I looked, the more I realised that who I was asking for advice didn’t seem to know much more than me. Now it seems that I have some accountants calling me for an “Opinion”.

I personally am in it to help people that are not sure if they need help or not. I inform them of what is available, give them some options and let them decide for themselves. As for others, I can not control what they say or do and am in no position to do so.

All I can say is to do your own “Due Diligence” and decide for yourself whether it is right for you. I have had no bad reports about myself and would like some feedback, good or bad.

CATA
Asset Protection Specialist
[email protected]

My feedback in my discussions and PM’s with you Cata has ‘all’ been positive [thumbsupanim]thanks for some of the feedback you’ve given me on various questions..

REDWING

“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator

The trustee is the controler, not the owner. For all legal and tax purposes the trust owns the asset but is controled by the trustee. The trustee has to pay as it is in control(liable) for what happens in the trust.

CATA
Asset Protection Specialist
[email protected]

If the trustee is the legal owner eg. a company, then why do we set up a trust at all as the trust would be unnecessary? And why does the trustee not pay expenses or recieve income unless it is a beneficary(not something I would do)?

CATA
Asset Protection Specialist
[email protected]

I’ll take you through it, slowly, one more time. The Trustee is the legal owner, fullstop. You need to understand the difference between a legal owner and a beneficial owner. Any Asset potection specialist ought to know this. Just type in “Trustee legal owner” in a Google serch and you will see this mentioned about 80,000 times!!!
Also, the Trustee is the controller of the Trust as long as the Appointor allows it (in a discretionary trust, that is)..so isn’t the controller really the appointor and not the trustee?
It is a trustee not a beneficairy who pays the bills etc.

Hi MattR

My understanding is the titles have to be changed to the new trustee’s name, but there is only a nominal fee at the State Revenue office to do this as the beneficial owners remain the same.

ps where are you studying law?

Terryw
Discover Home Loans
North Sydney
[email protected]