Being sued and want to purchase IP

Not really able to acheive both.

you could buy it via a trust structure, but to claim any gearing benefits in your personal name you would need to buy units (and borrow to buy them). The units are assets and would be up for grabs by creditors.

Another option is to buy in a discretionary trust which is the best vehicle for asset protection and to just where the income losses and try to offset these by having other income diverted into the trust – eg business income.

You really need good advice before you do all of this as if it is not set up properly you could still get caught if you were to go down. eg. deposit provided to the trust could be clawed back. Doing things to defeat creditors and hide money etc could also be illegal.

Trusts aren't really water-tight asset protection vehicles.  Once upon a time they used to be but Courts are finding more and more ways to look behind the structure to the trustees.

I would think that if you attempt to buy a property AFTER you have received notice of litigation against you, that is, you have been put on notice that you may have to fork out some money, a Court might consider that any Trust structure is merely to hide assets from the person who is suing you.  Without getting too legal and technical, this may be a reason for the Court to consider the assets of the Trust as being your personal assets.

It is very easy to find out Companies and Trusts that an individual is involved in.  Given that you are already in Court, I would expect that the lawyers for the person suing you will be all over any entities you are involved in and it would be raised as an issue.

If you do go ahead and buy it, make sure that you get EXCELLENT legal advice to ensure that whatever structure you buy in is watertight.  A discretionary trust is not the way to go: some recent court decisions have held that the trustee actually owns the property of the Trust.

I think you should work out how just how cheap the property is and decide whether you are willing to take the risk.  If you do buy the property and the plaintiff's lawyers find out, then you will be up for extra legal fees while your lawyers argue about why the plaintiff cannot have access to the property you want to buy.  You will be up for extra legal costs for the structure to be set up in such a way so as to minimise the chance of the plaintiff getting his/her hands on the property.

I think that you are asking for trouble.

Cheers

K

I think you are inviting trouble

Trusts are not water tight, but I think they are the best vehicle out there for asset protection. If you are getting sued it would be no good buying in your personal name. if you had a trust (discretionary) it would help for a few reasons – firstly it is harder to attack assets if they are easily found. Having a trust with a company trustee will help when one searches on your name at the land titles office. Next they may do a director search and shareholding search via ASIC. if you are neither of these, it will be much harder to find.  They may start to do searches on the names of your relatives. But each search costs money and time. Even if they did find something then they would need to prove your involvement. They would need to prove the money for deposit etc come from you and/or you controlled the trust and that you did this to defeat creditors.