Trust Structuring for maximal use and minimal tax

It really depends on how the trust is structured and the lenders policy. I have just written on this in my newsletter – send me an email if you want a copy.

Generally for asset protection reasons, you want to keep guarantees to a minimum. However, sometimes you may want to or need to include a partner for servicing reasons – your income alone may not be enough to get the loan through.

To give you flexibility, be careful with the wording of your trust deed. If you don’t need your wife’s income to service, it may be better not to name her at all on the trust deed at all.

Some lenders want a guarantee from all adult beneficiaries named on the deed. So I would consider having neither your wife nor your son named at all on the deed. Each will still be a beneficiary, coming under a general beneficiary category due to their relationship to the trustee. No need to name them.

Your wife still may be able to guarantee the loan if necessary, but not naming her will mean you can also leave her out, and preserve her borrowing capacity for next time.

Terryw
Discover Home Loans
Parramatta
[email protected]
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