All Topics / Creative Investing / Can funds in a trust be used as equity?

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  • Profile photo of MikkoMikko
    Join Date: 2013
    Post Count: 26

    Hi guys,

    I’m about to set up 2 managed funds accounts for my daughters. If I set them up in a trust structure, can the funds in there still be borrowed against for future investment properties?



    Profile photo of Corey BattCorey Batt
    Join Date: 2012
    Post Count: 1,010

    Managed funds as in shares?

    Leave this one to the legal eagles, but assuming you sold the shares and then made the purchases in the trust there wouldn’t be an issue as long as it meets the usual lending criteria. Otherwise you could potential lend the funds from the trust to a person/entity outside of the trust – speak with a lawyer/accountant on that situation.

    Corey Batt | Precision Funding
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    Legally speaking only if the trust terms allow it, otherwise a breach of trust.

    Do you want the trustee to obtain a margin loan against the shares? (see if trustee is allowed to do this first) and then consider whether this is a good idea in terms of risk. If not talking about margin loans then perhaps you asking if the trustee can lend trust money? Again depends on the powers in the deed.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide)

Viewing 3 posts - 1 through 3 (of 3 total)

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