Just when I thought I had put everything in place…
Company plus Trust (not Family) and I am the Trustee – everything perfect! Except when I go to sign the mortgage/loan docs for Settelement *thud* because I have named my (adult) children as Beneficiaries – the Lender requires 'each' one to sign a Deed of Trust Declaration. When I questioned the necessity of a Deed of Trust with signatures – other than my own, the person said "that is my understanding, although I am not a legal person".
I have never had to do this previously..any ideas as to why this has kicked in? Can someone point me in the direction to the ruling (ASIC, I believe)?
As it happens (doesn't it always?), my (adult) children live in different states of Australia – let me add, settlement is 15th October!
Waiting for my Accountant to call me – but can the Power of the Forum help, please?
Thanks.
No-one? Many lenders do require this many dont.
Not sure who the lender is but i think i can figure a guess.
Had a loan for a client approved today with a DFT and Company Trustee and standard 6.55% vairable rate, No application,valuation fees etc. No requirements for Adult Beneficiares to sign Deed of Trust and no legal fees to assess the Deed. be suprised how many lenders dont treat these applications as Vanilla deals and try and load the interest or applic / legal fees.
Normally your Broker would have advised of the requirement when you lodge the application so you could be prepared.
if you want to settle on time i would be complying as quickly as possible.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard. You are a gem!
*sigh* Will get on it…just too many twists with this Lender. Nearly over tho and never again!
Cheers.
Who is the Lender ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
St george…and I reckon you'd have guessed right.
Next time I'll call, okay? l
Funny i was going to say Rams or The Dragon.
All owned by the same big brother Westpac so doesnt suprise me.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Its best to never name beneficiaries where possible and that gets around the problem. You could possibly amend the trust deed but you need legal advice as it could cause a resettlement.
I am curious what role the company plays if you are the trustee. I am also curious what the deed of trust declaration says. If the beneficiary is saying X holds the property as trustee for me, then this is what the original trust deed would say. I suspect it is something like the beneficiary acknowledging the trustee is borrowing on behalf of the trust and that they don't have a problem with this.
You also have to be careful about stamp duty issues with declarations of trust – if you are not careful double stamp duty could apply so don't sign without legal advice.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Richard – spot on.
Terry – it is to let the beneficiary know that the trust is borrowing funds and therefore unlikely to pay a dividend. As I understand it.
Your last comment is too scary to contemplate so I hope not to go there…I intend seeking advice to have the trust amended.Thanks…let you know how it goes.
if thats all it is then it shouldn't be a problem
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry, thankyou for your insight and yes, seeking legal advice…*shudders*.
Have you had a client go through such an issue…I expect so, or you wouldn't have brought it to our attention?
You know, I really do loads of research before I make decisions…just goes to tell that there is always a question that isn't asked! In this case, I thought I had covered every scenario…sometimes learning curves are brutal.
Cheers and thanks.
Yes, when I was a broker I had a client have the same problems with St G. Client had to ask a family member who didn't even know about the trust for her permission to get the loan.
I haven't seen a double stamp duty issue, but I have heard of solicitors mucking it up and a client getting slugged twice.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Ay yi yi! It's a minefield out there, that's for sure.
Thanks, again.
Just to clarify on this situation, if the deed is written so it lists Daughter of beneficiary xxxx or something like that, with no names, then lenders will not request all beneficiaries to sign the deed of trust?
Also will this stop them requesting non named beneficiaries to give personal guarantees?
Normally you wouldnt nominate son or daughter but merely children of the Trustees
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And if no names are mentioned the lenders can't ask for guarantees or letters etc. It is only a few lenders too, not all.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Update to my original query…made settlement, just!
Each person (legal and accounting) I spoke with, other than Lender, agreed there was nothing to gain by asking the beneficiaries to sign the document.
Lessons learned and documented. Richard and Terry, thanks for your input…never underestimate the comfort a few words of wisdom can bring.
Good to hear.
Actually there is a point to the letter. Sort of
Supposed I owned a property for you as trustee. You wouldn't want me to go out and mortgage it without your consent. The is the principle they are applying – even though the trust deed would be permitting the trustee to mortgage the trust property.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
No-one? 
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