Heaps – here is just a few

Taxation – trust income retains its character. So if a unit trust made a capital gain it could flow through to the individual as a capital gain if the units are owned by a DT. If the units are owned by a Company then the character would change to that of divdend.

companies also do not get the 50% CGT discount

Asset Protection
assets owned by a discretionary trust generally don't form part of someone's estate if they are bankrupted. If a person owned the shares then these shares would – and could fall into the hands of creditor so any profit by the unit trust could go to the creditors.

Its when you go senile – or die that counts!

You need to plan for an attorney to operate in your place if you go into a coma or disappear or go crazy. The trust must go on. But it is  a bit tricky with a trust as a trustee cannot delegate their powers.

When you die you go to heaven but the trust continues. So control of the trust must be passed on. If you control the appointor role in the trust then you need to make sure this role is passed on. Ideally  the deed will say who the next appointors will be. If it doesn't then maybe it could be the legal personal representative of your estate – if you die intestate or someone you don't like gets control (exspouse?) then they could control the trust. There are many reasons why the executor you named in your will may not be the executor of the will (the role could be challenged, refused, death, coma, crazy, disappear etc).

This is another reason why a company is a good idea as trustee – when you die the title doesnt need to be changed. If you were trustee then the title for all property owned would need to be changed to the new trustee – which could mean stamp duty in NSW depending on the wording in the deed. A major hassle anyway.

What state is the trust going to be set up in and what state is the property?

It could be exempt depending on:
size,
if was ever income producing
if you wil be purchasing another main residence

up to 6 years absence.

Yes. see http://www.somersoft.com/forums/showthread.php?p=871036#post871036

I don't get what you are saying, but it seems like you want t reborrow money on the old house and apply it to the new house. If you do this you won't improve your deductibility because the purpose of the loan will be private.

nomad.

I am a solicitor with a knowledge of estates. I can also speak Japanese. If you want you can email me what you have and I will look into it.

An attorney has a duty to act in the best interests of the donor – so your sister in law may have grounds to sue if they have enriched themselves. As Rob says the POA ceases at death, but the executor or administrator of an estate also has a duty and they can be personally liable as well. If your brother passed away 3 years ago then the estate should have been wound up and distributions made – usually within 12 months. Could it be that hte estate has been wound up and there is money in trust for the children?

Maybe you are correct. If one person were to stop contributing then their overall share of the SMSF would decrease as a percentage. But by combining forces this enables the fund to leverage and purchase some bigger assets like a property.

I am not sure about voting rights – if a person's % decreases does their voting rights?? Probably not because all members would be trustees or directors of the trustee. But I haven't looked into this so may be incorrect.

Best to remove the discretion though.

There are probably heaps more issues, but I cannot think at the moment. Oh, enduring powers of attorney is another. Imagine what would happen in one person were to be injured and in a coma. Another leaves australia for a year or so.

Death is the major one.

Imagine you and wifey die and the two brothers take over. If you do not have a valid binding death benefit nomination then the trustee of the fund will decide (to an extent) on who to pay your death benefits to.