Just covering all possibilities.
Michael
2 points:
1) I have heard it is harder to get banks to accept hybrid trusts.
2) I have also heard Dale GG mention that Hybrids may not be as safe from a asset protection point of view.Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Michael
I have no experience (as a mortgage broker) with getting loans for clients with Hybrid Trusts soI don’t really know how banks will treat them. I have had client purchase property thru a discretionary trust and the bank always asks for a copy of the trust deed which they (supposedly) have their legal people scrutinise to make sure the trust is allowed to borrow (etc). (They probably don’t even look it!)
As you are going to use Dale, you can’t really go wrong. People must be getting finance approved using the trusts or they wouldn’t be using them.
Michael, it looks like you are becoming a bit of a trust expert!
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Michael,
I also use Gatherum-Goss & Associates and spoke to Sharon today about my structure.
She was able to set up a Pty Ltd to act as corporate trustee; a discretionary trust to run my business through, and a hybrid trust to purchase assets (shares & property) in. As you know, it’s important to seperate your business dealings from the assets you hold.I definitely think a hybrid trust is the way to go, and from what you say about the trust deeds, they are identical except that units are issued with a hybrid.
I know Dale strongly recommends the trust structure, and also advocates using a hybrid for the extra advantages that you cannot get with a discretionary.
I haven’t had problems with obtaining finance because i haven’t yet tried to borrow through the trust, but i have opened cash management accounts in both trust names as required. The bank (St George) only wanted copies of the trust deed and a certified copy of my registration of a company name. From the bank’s point of view, the accounts are opened in the name of the company.
From what i understand, you need to go guarantor for the loan anyway; so then you go out and borrow the money from the bank and then lend it to the trust by buying units in it.Hi,
We have borrowed money in our Discretionary Trust, no prob.’s, you have to go guarantor and supply a copy of the deed as previously stated.
My question would be this?
If Hybrid Trusts are the way to go, could you change the deed of an existing Discretionary Trust i.e. add the new sections to make it a Hybrid Discretionary Trust??
Ross.
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