How long does it take to set up a company and Discretionary Trust

If you take a DIY approach you could do it online quickly – but you run the risk of setting it up incorrectly which will be costly in the long run.

A decent account should set them up for you – so the timing will depend on how quickly your accountant works.

Perhaps aim to have your offer verbally accepted before signing the contract.

Cheers

Jamie

Careful with setting up trusts online.  Many, many people stuff it up.  If you don't get it right it is expensive to fix.

We setup companies and trusts constantly but also have the advantage of pulling people's structures apart in civil litigation which really gives you a great insight into what to do and what not to do.

Accountants can set up also, but should not be advising on asset protection and other legal areas as they are not qualified to do so.

I could set one up for you in an hour over the phone, but it wouldn't be the right way to go about it.  We would always recommend that you sit down with us and work out your overall structure and plan for how your current needs fit in with that.  We would then recommend that you take our structure to your accountant for feedback,

I have a Masters in Law, primarily in tax law and yet still think that you should get the benefit of an accountants perspective on it.

Having a team around you consisting of a property accountant a property lawyer and a great mortgage broker, preferably all of whom are investing themselves is where it is at. 

I've been approached by a forum member to fix a trust he set up incorrectly. Property already purchased so it would take around $5k in legal fees to fix this particular problem with all the loans being redone. Past tax mistakes unable to be fixed.

A trust could be set up within a hour, but you really need time to seek legal advice (from a lawyer!!!) and to digest this advice. ie you should ideally stew things over for a while. Corporate trustee/individual, strucutre of the trustee company, structure of the trust, type of trust, succession plan for trust, trustee duties, trustee powers, asset protection enhancements, how to use the trust, how to get money into the trust etc all need to be considered. You should also consider the tax side of things too.

dgirl – if you're in Sydney, give Terry a buzz to see if he can set it up for you.

Cheers

Jamie

I'm not sure about legal professionals but accountants and brokers (well most that I know of) will take on interstate clients.

Cheers

Jamie

Hi Terry, since we are on the topic of discretionary trusts, could you tell me how difficult it will be to transfer my PPOR onto my trust structure? The bank that I used did not want to loan to a trust and as such, I could only get the loan if my partner and I bought the property in our names. We knew that we were potentially exposing ourselves as we intend to rent out our current PPOR in future. Unfortunately at the time, we didn't really have a choice in the matter. It was either buy with our names or do without the loan.

If we were to transfer the title to our trust in future, what sort of costs are we looking at? I think at least one will apply – capital gains tax (sigh!).

Appreciate your insights as always.

Thanks Terry, I'm happy to hear that its not a difficult process, albeit cumbersome.

I initially was under the (mistaken?) impression that it would be wiser to protect your investment assets by not owning them individually but by a trust that you effectively control. This reduces one's liability should a tenant decide to sue you for an unfortunate injury that could take place on your IP.

However, I get the feeling that my understanding could be incorrect in part. The CGT that I will probably have to pay, plus the full stamp duty (payable again I might add) is not something I want to do if I can legally avoid doing so. Perhaps I need to discuss this with you personally in future…

Thank you for your thoughts on this. It has piqued my interest.

Cheers!

Firewater

Hi,

I am new to this forum and hoping I can just jump in on this thread with my question.

My husband and I have had our IP for about 7 years and was originally negative geared but is now almost positive geared and I am now looking into building a positive cash flow property portfolio. 

Should I set up a trust for the properties? Or as Terry suggests above, keep the existing one the way it is, in my husbands name, and set up one for future properties? Terry also alludes to the huge tax benefits of of a discretionary trust, any recommendations where I can  go to get good advice on trusts, accountants and mortgage brokers?

Any advice would be helpful.  Have started reading books and trying to do own research but still feel lost. We have also made some financial mistakes over the years and now want to move ahead but am a bit unsure.

Thanks,

Teresa

Thanks Terry, I will  have a read.