Asset Protection

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From: Gordon Austin


Hi All,

If my wife who is a partner in a company is sued and all the investment properties are in my name, can the agrieved party make any claim against these properties?

I am considering setting up a trust but with no children and much less likelihood of me being sued I am wondering if it is worthwhile.

Gordon
 
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Reply: 1
From: Duncan M




A check I did a couple of years ago which suggested that your houses are VERY safe
in the circumstances you've described. Unless you've only recently
transferred them to your name (from joint ownership) because of a pending
legal problem, ie. the transfer will be unravelled.

Regards,

Duncan - Lawyer Wannabe, Accountant Wannabe.
 
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Reply: 1.1
From: Paul Zagoridis


It would be extremely hard for Gordon to catch such sexually transmitted debt.

His wife is a "partner in a company"? That almost makes sense, so it is dangerous because a little knowledge is a dangerous thing. The company could be sued, the wife may be personally liable if she is a director or in some other employment-related ways.

Gordon wouldn't become liable unless he has inadvertently become jointly or severally liable.

And that young grasshopper is why a trust is a wonderful thing even when there are no children. You own nothing. Who cares if you become liable?

Also what happens if Gordon becomes liable some other way? Driving a vehicle whose registration has just expired? Dropping a meat tray on the floor of a pub? Causing and accident in a sporting event?

Owning the property in your name exposes the assets to every action you take. Owning assets in an entity only exposes them to actions the entity takes.

Paul Zag
Dreamspinner
The Oz Film Biz site is archived at...
http://wealthesteem.dyndns.org/
 
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Reply: 1.1.1
From: Dale Gatherum-Goss


Hi

The best form of asset protection is a trust with a company as trustee.

This CANNOT be beaten!!

Dale
 
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Reply: 1.1.2
From: Gordon Austin


Paul,

Thanks for the info. Can you recommend any good "up-to-date" books/literature that explain how trusts work.

The hard part will be trying to find the right structure for our circumstances. For example, my wife is on a very good income but mine is quite low. Therefore by putting the assets in my name the tax benefits are much less compared to having the assets in my wife's name. However the risk of litigation is much higher for her compared to me. It will be interesting to see if a structure can be setup to protect our assets and take advantage of my low income position. Anyhow lots of reading and research to do. Any help is greatly appreciated.


Thanks - Gordon
 
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Reply: 1.1.2.1
From: Duncan M


The definitive text is:

Title: Family Trusts (2nd Ed.)
Author: N. E. Renton

All aspects of setting up and running a family trust are dealt with
including taxation and social security rules affecting trusts and their
beneficiaries. It discusses trust deeds and the roles of the settlor and the
trustees.

Wrightbooks Publishers
ISBN 1876627573


Duncan.
 
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Reply: 1.1.1.1
From: Property Investor


Hi Dale,

How are you?

In regards to your second last post on this topic. What would be the set up costs?

Regards,
Mannie.
 
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Reply: 1.1.1.1.1
From: Dale Gatherum-Goss


HI Mannie!

A trust costs about $550 which includes the $200 stamp duty that the Victorian Gov charge. (Other states are different.)

A company as trustee adds another $1,320 when we do it.

These costs include applying for an ABN; a TFN; Workcover, if needed; and anything that is necessary to get you operational.

Cheers

Dale
 
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Reply: 1.1.1.2
From: Greg Mowat


Just a question on a trust with an Aust. Co. as trustee.

If you're a director and shareholder of that Co. does that put the trust at risk in any way?

thanks
Greg
 
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Reply: 1.1.1.1.1.1
From: Gordon Austin


From what I have been told by a number of individuals who have trusts in place the setup fees are not so much the issue. It is the yearly accounting fees that can be very high in many cases. Given that every person's situation is unique obviously the costs vary but it would be interesting to know roughly, on average, what the yearly accounting fees would be to run a trust and associated company?

Gordon
 
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Reply: 1.1.1.1.1.1.1
From: Duncan M


There's no single answer..

My bill for last years work was $2,200

This covered:


2 Individual Returns.
1 Partnership Return
1 Company Return (corporate trustee)
1 Trust Return

7 properties held personally.
1 property held in trust.

I provided my accountant with detailed, well organised records. And the
total cost also included various conversations, emails, phone calls I'd made
to him during the year..


On top of the tax return costs I also had to pay $200 for an ASIC return for
the company.


Hope this gives you some ball park figures.


Duncan.
 
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Reply: 1.1.1.1.1.1.1.1
From: Gordon Austin


Thanks Duncan,

That's a lot less than I expected. I suppose it pays to find a good accountant who's fees are reasonable and to make sure you keep good records yourself. In terms of setup costs I've heard of people paying some rediculous fees basically because they didn't make an effort to seek good advice initially and shop around.

Gordon
 
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Reply: 1.1.1.1.1.1.1.1.1
From: Duncan M


This message is in MIME format. Since your mail reader does not understand
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Our setup costs were $1,200 for the company and $10 for the trust. My
accountant provided Trust Deeds that we were happy with and talked us
through the process of having them 'stamped'.

Call me a cynic, I'm sure 99% of Lawyers use the same deeds over and over
again and charge $100's of dollars each time..

Duncan



-----Original Message-----
From: propertyforum Listmanager
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Subject: RE: Asset Protection


From: "Gordon Austin" <austini@austarmetro.com.au>

Thanks Duncan,

That's a lot less than I expected. I suppose it pays to find a good
accountant who's fees are reasonable and to make sure you keep good records
yourself. In terms of setup costs I've heard of people paying some
rediculous fees basically because they didn't make an effort to seek good
advice initially and shop around.

Gordon



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Our setup costs were $1,200 for the company and $10 =for the trust. My accountant provided Trust Deeds that we were happy =with and talked us through the process of having them ='stamped'.

Call me a cynic, I'm sure 99% of Lawyers use the same =deeds over and over again and charge $100's of dollars each =time..

Duncan




-----Original Message-----
From: propertyforum Listmanager
[mailto:listmanager=@bne003w.webcentral.com.au]
Sent: None
Subject: RE: Asset Protection



From: "Gordon Austin" =<austini@austarmetro.com.au>


Thanks Duncan,


That's a lot less than I expected. I suppose it =pays to find a good accountant who's fees are reasonable and to make =sure you keep good records yourself. In terms of setup costs I've =heard of people paying some rediculous fees basically because they =didn't make an effort to seek good advice initially and shop =around.

Gordon




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Reply: 1.1.1.2.1
From: Dale Gatherum-Goss


HI Greg!

Not unless you act dishonestly; or take shortcuts in establishing the structure.

As always, I would suggest a chat with your solicitor would be in order though.

Dale
 
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