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See a lawyer, but before you do, try and work out the following
1. what event can trigger an exit.eg death, incapacity, bakruptcy, desire to leave the venture, desire to force someone out of the venture etc etc.
2. can there be a forced exit – worth considering if someone doesn’t pull his weight, or if one of the unithlders dies would you prefer tp force his estate out rather than have his estate beenficiaries force on you
3. a formula for fixing the exit price sometimes this can be as simple as saying the exit price will be the value of the units as determined by an agreed (named) independent accountant
4. time for payment
5. does the exiting party have the right to sell his units/shares to an incoming person he selects, or do the remaining holders have any right of veto/approval of a new incoming unitholder.You can do better than looking up forms on the net and blindly applying them. Would you do that if you had to have an operation? Can you imagine buying a scalpel and an anatomy textbook and operating on yourself!!!!!
As a lawyer I would say “see a lawyer”. While alot of pepole whinge about us, as a profession we have been doing this sort of thing for over 1,000 years so there must be some need.Yes it is possible. It is called a Limited power of Attorney as disctinct from a General one. You use the standard form and add the limitations eg “The authority conferred by the Limited power fo Attorney is restricted to executing documennts and doing all things in connection with the [sale/purchse etc] of property at [addesss] in the nmae of the Principal.”
Once the job is done eg the property purchased or sold, then by law the Power of Attorney automatically expires
You best get a lawyer to draw it up.
Powers of Attorney usually have to be registered before they can be used eg in NSW registered with the Registrat general. Deposting it at hte Local Court will be pretty much useless.Most Discretionary Trust deeds allow the Appointor to remove and replace the Trustee whenver the Appointor wants to, for any reason or no reason. Thats why the Appointor has the real control over a trust.
A Discretionary trust still has very good asset protection advantages. The asset protection benefits are for the beneficiaries. The point is that the beneficiary doesn’t own what is in the trust. If a beneficairy is sued then the creditors cannot say to the beneficairy “you own that asset, put it up for the creditors” – from the beneficiaries’ point of view what you don’t own you can’t lose.
There is no asset protection if the Trustee becomes liable for a debt which is incurred out of the trust eg a trustee owns a porperty, someone slips over and succesfully sues the property owner. The trustee is the property owner and has to pay the damages.The trustee is entitled to draw money out of the trust (or sell the house if he has to) to find the money to pay the damages.
If a trustee incurrs a debt which has nothing to do with the trust property then the trust assets are protected eg a person’s dog bites someone and as the dog owner he has to pay damages – if he is a trustee for a trust, which is nothing to do with the dog, then the debt is nothing to do with the trust, so the trust assets are protected.I’ll take you through it, slowly, one more time. The Trustee is the legal owner, fullstop. You need to understand the difference between a legal owner and a beneficial owner. Any Asset potection specialist ought to know this. Just type in “Trustee legal owner” in a Google serch and you will see this mentioned about 80,000 times!!!
Also, the Trustee is the controller of the Trust as long as the Appointor allows it (in a discretionary trust, that is)..so isn’t the controller really the appointor and not the trustee?
It is a trustee not a beneficairy who pays the bills etc.She is the same person whether she has a new name or not. Anyone thinking they can easily “change beneficiaries” or “add beneficiaries” by simply having a Minute done or changing the trust deed must have a morbid desire to add to the coffers of the revenue authorities. If you add a new beneficairy to a trust you are likely to fall into the trap of what they call a resettlement which can bring about all sorts of stamp duty and cgt horrors. That is why when trust deed are properly set up they describe a wide group of people, such as ‘the children of…”, so that any new children automatically come within the list of beneficiaries without having to change the list of beneficiaries
No, its not correct to say that for all legal purposes the trust is the owner. The trustee is the legal owner – that is why, for instance, the name of the trustee appears on the title deed, and why if you are suing a trust you sue the trustee
The trustee is the owner – its/his/her name is on the title deed of the property. The trustee is the one who is sued. If the person suing wins the case, it is the trustee who has to pay… if the debt is incurred by the trustee in his role as a trustee (which in the situation you mentioned would be the case) then the trustee can draw on the assets of the trust to pay the debt.
That way, anyone claiming can always get their hands on the assets of a trust.
on the other hand if the person who happens to be the trustee incurs a debt which had nothing to do with the trust, then the person claiming cannot get into the assest of the trust
