Ive been searching google and there seems to be a lot of shelf trusts set up, in particular a hybrid scheme for about the $550 mark. Has anybody used these or do most people get accountants solicitors to draft them up? What are some of the critical clauses that you need in the trust?
Thanks for your help guys, greatly appreciated
Also what does PPOR stand forDave
PPOR – Principal place of residence (your own home)
Many of the online companies that you can buy a shelf HDT from do not have any individual clauses inside their Trust Deed and you get the everyday bog standard Deed.
For another $400 you can get a tailored product (sorry not supposed to be pun) prepared by a proper Accountant.
I know what i would choose.
Cheers
Richard Taylor
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Yes I would say it is very dangerous in setting up your own hybrid trust deed unless you know what you are doing. Spend $500 extra and get some peace of mind.
eg. how many units to issue, who will be unit holder, trustee, who to include as named beneficiaries etc.
Terryw
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so what else would i need to make sure are added in to the clauses to make piece of mind? Also with the units issued, say i want to buy 500k of property with the initial set up, and then 12 months later i want to buy something else, do i have to get the whole trust re done or can i just add an additional clause in there with out to much hassel.
Im guessing by what your saying is standard charge for set up of one of these is around the $1,000 mark
I think you ca get a good deed from a good accountant for around $1100 or online for around $600. Units can be issued at any time, I think, so if you bought another property, more units could be issued then – maybe a different class of units. The deeds are generally already made up, the accountant does not add clauses (as this would need to be done by a solicitor as the deed is a legal document), but the accountant can help you decide who to include where.
Terryw
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so if deeds are generally made up already and they cant be changed by an accountant, why would it be recommended to get the accountant to issue it rather than buying it online??
would that just be so an accountant can see if its totally suitable for your situation?
cheers guys
Terry and Richard really seem the back bone of this and have a heap of technical knowledge…
yes, there are many different deeds so the accountant can help decide if you need a unit or discretionary or hybrid etc. Also the accountant can help decide who does what role. eg if you put your son as appointor you will never be able to distribute to him = one of my clients did this!
Terryw
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hmmm, thanks, i think the deed is the important issue and how it is structured…
thanks
cheers
Originally posted by Terryw:yes, there are many different deeds so the accountant can help decide if you need a unit or discretionary or hybrid etc. Also the accountant can help decide who does what role. eg if you put your son as appointor you will never be able to distribute to him = one of my clients did this!
Terry,
I think this is a rare occasion where you are wrong. It is the SETTLOR who cannot receive distributions, not the Appointer.
As for accountants a lot of them are simply USELESS and know very little about trusts. Ask them what a “Hybrid Discretionary Trust” is and most of them won’t know the answer.
Originally posted by tom1000000:Originally posted by Terryw:yes, there are many different deeds so the accountant can help decide if you need a unit or discretionary or hybrid etc. Also the accountant can help decide who does what role. eg if you put your son as appointor you will never be able to distribute to him = one of my clients did this!
Terry,
I think this is a rare occasion where you are wrong. It is the SETTLOR who cannot receive distributions, not the Appointer.
As for accountants a lot of them are simply USELESS and know very little about trusts. Ask them what a “Hybrid Discretionary Trust” is and most of them won’t know the answer.
Yes, Thanks Tom you are correct. I meant to write Settlor, not the appointer. Sorry.
Terryw
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As for accountants a lot of them are simply USELESS and know very little about trusts. Ask them what a “Hybrid Discretionary Trust” is and most of them won’t know the answer.
i very much agree to this, i am actually a unversity undergrad studying accounting in my final 6 months, nothing we have done have covered trusts (except a tiny bit on how they are taxed) and there are no electives for us to take and learn about them. [baaa] I Have friends working in a range of accounting firms which none of them know at all, they dont even know if there practices set them up so this is why im just that little concerned when im told to see an accountant as they can help me
Hi DaveA, couldn’t agree with you more on the issue of getting trust advice from accountants.
Seen my accountant but have sceduled to see another. This one walks the talk. The practical bit that no uni can prepare undergraduates with. I guess that the difference.
Wish me luck the accountant doesn’t cash in on his ‘expertise’. [hmm]
CT
id be interested to know if he is charging u an hourly fee or a set fee for set up and discussion of it…. would it be cheaper for someone who knows what they wants???
coz it could become an expensive exercise to set up a trust if u need 5 accountant referalls, id imagine they would charge atleast $150 an hour
Originally posted by DaveA:As for accountants a lot of them are simply USELESS and know very little about trusts. Ask them what a “Hybrid Discretionary Trust” is and most of them won’t know the answer.
i very much agree to this, i am actually a unversity undergrad studying accounting in my final 6 months, nothing we have done have covered trusts (except a tiny bit on how they are taxed) and there are no electives for us to take and learn about them. [baaa] I Have friends working in a range of accounting firms which none of them know at all, they dont even know if there practices set them up so this is why im just that little concerned when im told to see an accountant as they can help me
Hi Dave
I think trusts are a very specialised area. The National Institute of accountants and various other bodies run courses on Trusts for accountants etc. Continuing development. have you seen the Atax Masters courses, http://www.atax.edu.au. There, you can spend whole semesters on Trusts, CGT and even a whole subject on Stamp Duty!!
Terryw
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Hi all
I am going in to see my solictor tomorrow regarding, among a couple of other things, setting up a Hybrid Discretionary Trust. When my accountant asked me why I would want one of those, I felt that it was time to educate myself and take some control. I’ll let you know if the solictor is much better tomorrow….Lets hope your solicitor has heard of these.
Solicitors are like accountants most do not know about trusts, although it is a subject of their law degrees. I had a solicitor as a client who had 4 investment properties in his own name. I asked him why he didn’t use a trust and he just didn’t understand it all.
Terryw
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i know there would be hundreds of hours you can spend on learning, the atax course looks good, however i doubt you can spend a whole semester on it, i mean i would of thought it was basically a tell subject, not a learn, i doubt you can minipulate the government to so i really wonder what they would teach
there are some definante experts in this area…
Dave, not sure what you mean about manipulating the government!? There is a lot to learn regarding the taxation of trusts. for example there are many different types of trusts and these are taxed differently. There there are the family trust election rules, the rules preventing the trading of losses (forget what this is called) and the legals aspects, “Trust law deals with the nature of a trust, the obligations and duties of trustees and the nature of a beneficiary’s interest in a trust”, not to mention the standard tax stuff too.
have look at this link, the one i gave above was incorrect:
http://www.atax.unsw.edu.au/Terryw
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sorry, what i meant was the stamp duty manipulation….
i imagine there could be many many units on trusts…
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