You do not need a company set up as trustee, but this adds additional expenses. Cost of company is about $1000. Having yourself as trustee is free with no yearly asic fees, but offers slightly less protection.

Cost of discretionary trust is about $200+ online or $1000+ with an accountant.

Hybrids are generally not available online, but I think http://www.chrisbattern.com.au has them for about $1200+

Terryw
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Any other opinions on this topic?

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Without equity or deposit it will be hard.

Some options include:
-100% loan (eg St george)
– Find a vendor willing to lend you the deposit
– Borrow a deposit

If you rent out your own home, it may have CGT implications – you can only claim one home as your main residence at one time (except for a 6 month overlap period).

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Most low doc loans require the applicant to be self employed for a period of 2 years or more. Evidence of this is the registration of an ABN. So the sooner you get one hte better!

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Maybe take the tenant to the residential tenancy tribunal and get a judgment against him for the repairs and cleaning. You can then chase him for the money -using a debt collector if necessary.

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http://www.truststructuresguide.com.au/

is another book – lists 13 different types of trusts.

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Bankwest will lend up to 90% on rural land.

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My understanding of trusts and asset protection is this (I am not a solicitor or accountant).

Assets owned via a trust are not owned by the trustees or beneficiaries. So if a trustee is sued personally, their assets in the trust are relatively safe. If they get a judgment against them, their personal assets can be seized by creditors, but the assets in a trust cannot – generally.

However, if before going bankrupt they sold their house to someone (including a trust) within a certain time frame, this sale can be reversed. This time frame was 6 months but recently the law changed on this – think now 5 years.

If the trustee has taken a loan out to buy a property, and guarranteed this loan, if the property were to be taken back by the bank (ie foreclosen upon), the trustee’s personal assets will be at risk if there is any short fall. This is because of the personal guarrantee.

Same with a business. If you are using a trust to run your business, and have a 5 year lease with a personal guarrantee, if the business fails, you will still be personally liable.

If you are a trustee and have investment properties with problems, the tenant may be able to sue the owner if injured – the trust, and other assets of the trust may be at risk. (this is why some people set up new trusts after a few properties).

I think the trustee may be personally liable as well in certain circumstances. Hence, some people use a company as trustee, so if that happens, the company can be woundup – it will ahve no assets.

If you are running a pty ltd company, directors are protected to a certain degree as well. eg you rent a place, without a personl guarrantee, the business fails – you can wind up the company without your assets being at risk.

But if the director of the company has done something illegal (such as trading while insolvent) then they can be personally sued with their own assets at risk.

With the family law court, they can look behind the trust to determine the ownership of the assets. So if you control a trust, and get divorced, you spouse may still have a claim on those assets.

Centrelink are onto trusts as well. If you are trustee, director of a trustee company, or appointer, beneficiary etc, then Centrelink will look at the assets and income of the trust as if they are your personal assets.

If you are a drug baron, growing marijuanna in your trust owned farm, the property can still be seized by police. etc etc.

Trusts are certainly not worthless and offer the best form of asset protection.

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Many people use trusts. There are plenty of reasons, positive being:
– Asset protection
– Estate Planning
– Tax savings

I cannot think of many disadvantages, but one is property in a trust does not get any land tax threshold (so you may pay a bit more land tax).

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Even if you offer to put them up in a the best hotel in town for a few weeks, it may be worth it. Or buy them a car! (wonder if you could claim this)

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