Trust vs own name

You should consider trusts from the first property onwards – not neccessarily using trust to own one but to at least consider it..

Trusts generally don’t help much under the family law side

Benefits are broadly

estate pllanning
tax savings
asset protetection

See my book “Trusts and Tax for Property Investors”
download for free at http://www.propertytaxsolutions.com.au/

To set one up you should seek legal and tax advice and have a lawyer draft a deed. For stamp duty purposes trusts are generally set up with cash, just $10 or so, and this is added to later.

Surely you wouldn’t want to hold property in a Trust if they are negatively geared ?

@mstrump

There are a couple of different trust structures that you could use, a “unit trust” and a “discretionary trust” (or family trust). Without more information about your circumstances the following information is predicated upon the latter (which is suitable for tax optimisation within a family structure). The “discretionary trust” allows for income earned within the trust to be allocated to nominated beneficiaries at the discretion of the trustee. Thus if your spouse, who is a beneficiary is on a lower marginal tax rate you can stream income and realise a tax saving.

Some things to bear in mind:
– Any child under 18 who is a beneficiary under the trust will have any distributed income taxed prohibitively at the top marginal rate
– If you are the only beneficiary you cannot also be the trustee, however you can incorporate a Pty Ltd company of which you are sole director to act as trustee
– You will need a settlor to create the trust with a token amount (e.g. $10) and this should ideally be your accountant, lawyer or some other unrelated party (it cannot be a beneficiary). Once the trust is settled the settlor has no further rights or obligations.

tysmeister

• This reply was modified 9 years, 10 months ago by  tysmeister.
• This reply was modified 9 years, 10 months ago by  tysmeister.