All Topics / Legal & Accounting / Company Trustee

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  • Profile photo of rtsapsteadrtsapstead
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    @rtsapstead
    Join Date: 2010
    Post Count: 12
    March 4, 2010 - 3:05 am

    Hi All,

    quick question in regards to company trustees.

    I know you should never run a business that holds other assests (ei IP's) but does that also relate to the company trustee?
    I mean can you have one company trustee for 2 trusts, one which holds the asstes and the other trust as carrying on a business?

    Thanks

    Profile photo of Paul DobsonPaul Dobson
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    @pauldobson
    Join Date: 2003
    Post Count: 1,196
    March 4, 2010 - 11:37 am

    Hi

    I believe in always making sure that the company/trust structure that's holding the assets, eg. IP's, should do nothing but sit there holding those assests.

    To have the trustee company also conducting the business of a trading trust, to me, leaves it too open to attack.  Cpmpany structures are cheap.

    I have one acquantance that insists that we should have a company/trust structure for each property.  She hasn't talked me around; yet.

    Cheers,  Paul

    Paul Dobson | Vendor Finance Institute
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    An alternative way to finance your home.

    Profile photo of rtsapsteadrtsapstead
    Member
    @rtsapstead
    Join Date: 2010
    Post Count: 12
    March 4, 2010 - 9:35 pm

    Hi Paul,

    Thanks for that info,

    Yeah well that was my thinking as well, because one of the trusts is trading if the trustee gets sued both trusts would be open for attack, well that's my logic to it.

    Can anyone else shed some light??

    Profile photo of Dan42Dan42
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    @dan42
    Join Date: 2008
    Post Count: 619
    March 4, 2010 - 10:55 pm

    I would have a separate trustee. Why risk it? For $1000 (approx) you can have a separate company as trustee, reducing the risk of assets being seized.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    March 5, 2010 - 6:14 am

    I agree that it best to have separate companies.

    If the trust gets sued the trustee's personal assets and trust assets are at risk. If there are 2 trusts you may have to prove which assets belong to which trust. Remember the title is in the trustee's name so having 2 trustees would clearly distinguish between the 2 trusts.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Assist Business NetworkAssist Business Network
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    @assist-business-network
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    Post Count: 8
    March 13, 2010 - 10:18 pm

    In 99.9% of cases I recommend to my clients that you have a seperate trustee company for asset protection purposes.

    The only exception to the rule would be if there was absolutely no risk associated with the net assets held within the seperate trusts in which case it MAY be OK to use the same trustee.

    The issue which can arise is that the purpose people use the trusts for may change over time.  So a safe entity today may not be so safe in 5 or 10 years time.

    To be safe… pay the extra $500 – $1,000 to get a new trustee company.

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