Hi
I recently went to one of Dymphna's free seminars - gave the old brain a bit of a reboot so worthwhile. She pulls a reasonable crowd.
One segment was particularly interesting although nothing new, just got me thinking about it again - asset protection. Here is an interesting video done at one of her boot camps (not much different to what we got for gratis) It goes for 90 min so if you want to skip the examples of how you can come unstuck etc and go straight to the examples of structuring FF to 1h:08m
I have spent several days reading threads going back to 2005 plus other sites from accountants, magazine articles etc. Gee, TerryW certainly has contributed a lot over the years, a bit like our own resident solicitor, very appreciated!
When you hear trusts discussed as a way to protect assets it is made to sound simple - some say it is, others the opposite. The corporate trustee and discretionary trust seems the most liked and promoted, but it certainly has its costs and disadvantages, and the slightest balls up in executing can bring any protection crashing down. Just looking at the asset protection aspect it is a way of partitioning all your assets if you have a trust/corp trustee for each asset so in the worst case scenario all that is at risk is the equity in any asset within each trust if a claim is made against the trust, ie as owner of an IP. (This is my understanding put in a simplistic way)
My interest is purely asset protection, and although of greater importance to those in high risk, anyone can get unlucky. A trust structure can be used for future purchases, but those who already have property in your own name it is suggested that they be mortgaged to minimize equity at risk (2nd mortgaged to yourself for any vulnerable equity not held by bank). From what I read in old threads this also involved utilising a trust, but there was a question of having to account for where the borrowed money goes and loan had to be in place for 2 years for protection to exist????????.
I would be interested in what options are available, or practical for my situation.
If using a trust, the only people involved would be me, myself and I. I am not sure if being the sole director of a corp trustee with me as the sole beneficiary (would specify sole!!) is any different to multiple people involved. No need to go into too much detail, just the basics
If utilizing mortages, how can this be done. I did read a couple of 2005 threads on the topic, but they are quite old.
This is what it can be based on:
PPOR with inv loan of approx 55% (current) LVR. Money used for IP.
Some cash in bank offsetting about 40% of those borrowings.
IP with loan of 60% LVR, funds currently in 100% offset account waiting to be used for next purchase.
Negligible current income other than rental - neutral.
So, both properties have mortgages, although plenty of equity left, and cash in bank - (cash in one account = 1 loan payout). Different lenders, no X.
Next purchase might be a reno and flick, or used in a JV of some description (might post about that later)
What is my risk, and how best to minimize it/protect assets?? Appreciate suggestions from our resident experts ..... or those who have been burnt!
To what extent is info available to people who want to sniff around, who can access it, how, what does it cost. I guess the info available has an influence on risk/vulnerability. I would be interested in the details available because I know some people also use this info to assess deals - peoples situation, properties which are crossed, etc etc.
Thanks
I recently went to one of Dymphna's free seminars - gave the old brain a bit of a reboot so worthwhile. She pulls a reasonable crowd.
One segment was particularly interesting although nothing new, just got me thinking about it again - asset protection. Here is an interesting video done at one of her boot camps (not much different to what we got for gratis) It goes for 90 min so if you want to skip the examples of how you can come unstuck etc and go straight to the examples of structuring FF to 1h:08m
I have spent several days reading threads going back to 2005 plus other sites from accountants, magazine articles etc. Gee, TerryW certainly has contributed a lot over the years, a bit like our own resident solicitor, very appreciated!
When you hear trusts discussed as a way to protect assets it is made to sound simple - some say it is, others the opposite. The corporate trustee and discretionary trust seems the most liked and promoted, but it certainly has its costs and disadvantages, and the slightest balls up in executing can bring any protection crashing down. Just looking at the asset protection aspect it is a way of partitioning all your assets if you have a trust/corp trustee for each asset so in the worst case scenario all that is at risk is the equity in any asset within each trust if a claim is made against the trust, ie as owner of an IP. (This is my understanding put in a simplistic way)
My interest is purely asset protection, and although of greater importance to those in high risk, anyone can get unlucky. A trust structure can be used for future purchases, but those who already have property in your own name it is suggested that they be mortgaged to minimize equity at risk (2nd mortgaged to yourself for any vulnerable equity not held by bank). From what I read in old threads this also involved utilising a trust, but there was a question of having to account for where the borrowed money goes and loan had to be in place for 2 years for protection to exist????????.
I would be interested in what options are available, or practical for my situation.
If using a trust, the only people involved would be me, myself and I. I am not sure if being the sole director of a corp trustee with me as the sole beneficiary (would specify sole!!) is any different to multiple people involved. No need to go into too much detail, just the basics
If utilizing mortages, how can this be done. I did read a couple of 2005 threads on the topic, but they are quite old.
This is what it can be based on:
PPOR with inv loan of approx 55% (current) LVR. Money used for IP.
Some cash in bank offsetting about 40% of those borrowings.
IP with loan of 60% LVR, funds currently in 100% offset account waiting to be used for next purchase.
Negligible current income other than rental - neutral.
So, both properties have mortgages, although plenty of equity left, and cash in bank - (cash in one account = 1 loan payout). Different lenders, no X.
Next purchase might be a reno and flick, or used in a JV of some description (might post about that later)
What is my risk, and how best to minimize it/protect assets?? Appreciate suggestions from our resident experts ..... or those who have been burnt!
To what extent is info available to people who want to sniff around, who can access it, how, what does it cost. I guess the info available has an influence on risk/vulnerability. I would be interested in the details available because I know some people also use this info to assess deals - peoples situation, properties which are crossed, etc etc.
Thanks