Hi
I would appreciate it if you could advise me on my situation. I have some equity in my PPOR and the property is in my name. I am about to start a rather high risk business and do not want to risk losing the equity if I get sued.
Are there any way to protect my equity?
i heard that there is an equity bank trust (EBT) in which I can give the equity of my property to the trust eg $200k and the trust will give me a secured loan for $200K. that way should I get sued the creditors will be below the first mortgage and the equity bank trust. I understand that i will be the director of the EBT trustee. Can the loan documents from a related entity( EBT) stand in court and protect my assets? the loan is not registered on the title of the property.
Thanks very much for your help.
The debt to the EBT wont stop you from getting sued, whether the creditor finds the $200k or not, are you going to be happy being bankrupted? You should look at your insurance options as part of your risk strategy.
Modernity Investing
Email Mehi jer
you might have issues releasing such a large chunk of equity for that purpose.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
jer29e wrote:Hi
I would appreciate it if you could advise me on my situation. I have some equity in my PPOR and the property is in my name. I am about to start a rather high risk business and do not want to risk losing the equity if I get sued.
Are there any way to protect my equity?
i heard that there is an equity bank trust (EBT) in which I can give the equity of my property to the trust eg $200k and the trust will give me a secured loan for $200K. that way should I get sued the creditors will be below the first mortgage and the equity bank trust. I understand that i will be the director of the EBT trustee. Can the loan documents from a related entity( EBT) stand in court and protect my assets? the loan is not registered on the title of the property.
Thanks very much for your help.
There are a few promoters out there promoting this sort of thing – but none of them lawyers from what I can see.
How do you gift equity is what I would like to know. You can let a trustee take a second mortgage over your property, but a mortgage is only security for something – usually for borrowing money. So if you lend money to a trust that money is always your money and still available for creditors. If the arrangement is non commercial then the bankruptcy act has provisions which can unwind any such transaction.
There may be other ways to structure which are cheaper and more effective about 5 years after they are set up
I think your $20k may be better spent. Sell your property and spend the proceeds – if you are really worried. Then start again afresh structuring well from the get go.
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
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