Ballpark cost to set up a trust?

[Xjas]

I have a quote from lawyer to "incorporate a company" and "establish a trust"
and to "execute documents and have the deed stamped at the OSR"

The price is just shy of $3000 including GST, this price doesn't include applying for an ABN or TFN if applicable.

Just wondering does this cost seem reasonable?
Since I have never set up a trust before, or delt with a lawyer for that matter, I dont have anything to compare too.

This is in NSW if that matters.

 

[tvadera]

Hi,

Approx cost of 1200 with personal trustee and approx 1800 with corp trustee

Shop around and compare prices

 

[underdev]

Hi,

Approx cost of 1200 with personal trustee and approx 1800 with corp trustee

Shop around and compare prices

I can get the whole lot done for 2000. PM if you want contact

 

[MRO]

Company set up costs about $800 and trust around $400. The rest is time. Your accountant is too slow or charging too much. ABN and TFN application should be a couple of hundred at most. Can be done on the internet in under 20 minutes.

In saying that, no ones time is free so expect to pay above the actual costs shown above.

 

[coastymike]

Depends what you are getting for in the $3k. Does this include advice as well ?

Recent cases I've seen with low cost deeds and individuals doing it themselves include

1. mother on centrelink benefits named as a primary beneficiary and as appointor. deed did not exclude people on centerlink benefits in list of excluded beneficiaries. centrelink benefits lost.

2. who is the appointor of the discretionary trust ? is the right person in this role ? Should it be dual appointors ? should a company be appointor ?

3. does your discretionary trust have a controller ? most dt deeds i have seen don't include a controller. why is it important to have a controller ?

and the list could go on.

 

[handyandy]

3. does your discretionary trust have a controller ? most dt deeds i have seen don't include a controller. why is it important to have a controller ?

and the list could go on.

Mistrust can also fester in a more recent addition to the actors associated with the modern discretionary trust: the so-called “guardian” or “protector”. The role of this person is to provide an extra check on the otherwise wide powers of the trustee. This person can be given the power to veto certain trustee distribution decisions. This is important because the removal of a trustee by an appointer after the trustee has made an unsatisfactory allocation of income (or capital) will not prevent the allocation from being valid. In other words, the guardian or protector can provide protection against a circumstance that an appointer may not be able to protect against.

from

http://theconversation.com/beware-the-pitfalls-of-the-discretionary-family-trust-11224

 

[Xjas]

I'm not chasing a low cost deed or the cheapest price I can get, but I also dont want to be overcharged simply because I dont know any better.

The quote was for the work scope stated in my original post, no advice is included in this price expect for the 20 minute conversation we had at the inital meeting to discuss my requirements.
I dont think I was asking for anything difficult or complicated (relative to other trust structures at least), my request was for a single NSW land tax unit trust, with a corporate trustee, myself as the sole director of the company and myself holding 100% of the units.

 

[MRO]

i think $2k sounds about right including tfn and abn. Maybe contact underdev.

 

[handyandy]

I'm not chasing a low cost deed or the cheapest price I can get, but I also dont want to be overcharged simply because I dont know any better.

The quote was for the work scope stated in my original post, no advice is included in this price expect for the 20 minute conversation we had at the inital meeting to discuss my requirements.
I dont think I was asking for anything difficult or complicated (relative to other trust structures at least), my request was for a single NSW land tax unit trust, with a corporate trustee, myself as the sole director of the company and myself holding 100% of the units.

Why do you want a unit trust?

Also you can look through the cleardocs site and see what they charge for a self generated trust and company docs.

http://www.cleardocs.com/products-unit-trust-fixed.html

if you used these services (and a lot of accountants etc do) then you really do need to know all the ins and outs of the documentation you require.

why not ask your accountant for a quote rather than a lawyer

cheers

 

[Terry_w]

You can set up your trust for free. There are free precedents on the web if you know what to look for.

But, don't you think you should get some legal and tax advice? This is especially the case if your trust will be owning hundreds of thousand dollars in property.

Last week I saw some clients who had totally stuffed up their complex structure and it has cost them a fortune over the years.

I charge around $3000 for a company and trust set up and this includes extensive legal advice on various aspects such as Trustee duties, Director duties, beneficiary rights, asset protection - for beneficiaries going bankrupt, family law issues, death, losing control of the trust etc.

Most people that I see with trusts don't transact them well. Most consider the trust assets their own personal assets and don't understand the extensive legal requirements or seriousness of their breaches of the law.

 

[Xjas]

Why do you want a unit trust?

I want to purchase my IPs in a trust structure for future flexibility, a unit trusts ability to negative gear is important to me at this stage as my cashflow is limited.

You can set up your trust for free. There are free precedents on the web if you know what to look for.

But, don't you think you should get some legal and tax advice? This is especially the case if your trust will be owning hundreds of thousand dollars in property.

Last week I saw some clients who had totally stuffed up their complex structure and it has cost them a fortune over the years.

I charge around $3000 for a company and trust set up and this includes extensive legal advice on various aspects such as Trustee duties, Director duties, beneficiary rights, asset protection - for beneficiaries going bankrupt, family law issues, death, losing control of the trust etc.

Most people that I see with trusts don't transact them well. Most consider the trust assets their own personal assets and don't understand the extensive legal requirements or seriousness of their breaches of the law.

I am getting legal advice, I'm not asking how to do this on the cheap, I was wondering if 3K is a fair and reasonable price to pay for professional to set up this structure, presumable that entails some advice since he cant set up the trust without input from me which I cant give without some advice from him.

 

[Terry_w]

I want to purchase my IPs in a trust structure for future flexibility, a unit trusts ability to negative gear is important to me at this stage as my cashflow is limited.



I am getting legal advice, I'm not asking how to do this on the cheap, I was wondering if 3K is a fair and reasonable price to pay for professional to set up this structure, presumable that entails some advice since he cant set up the trust without input from me which I cant give without some advice from him.

Yes, sounds reasonable to me.

Don't forget the other benefits of a unit trust, depending on the circumstances
1. Ability to transfer beneficial interest of property without stamp duty in some states.
2. Ability to borrow for private expenses with interest deductible
3. Ability to transfer to a SMSF (without stamp duty too in some states)
4. land tax threshold
etc

 

[RPI]

We establish trusts and companies pretty much everyday and average cost would be $1600 plus GST for a property investment one.

I charge $300 to draft a trust and $620 for a company plus GST but including outlays. But may charge $5,000 plus GST for the advice that goes with it. Setting up the trust and company correctly is vital but if the entity is wrong or you use it wrong it will cost you a lot more than the advice.

If the lawyer is charging that much and not providing all the advice required around it and getting a true understanding about what you are trying to do, then look elsewhere.

Which ever professional you choose should be more about trying to understand where you are going and what you want to achieve and trying to build a mutually beneficially long term relationship as opposed to just trying to mark up a product.

 

[Xjas]

Thank you everyone for the replies, I at least now have a better idea of what to expect cost wise.

 

[mrsdawnrazor]

We have just paid $1700 ex GST for trust and company setup includign advice