Buying property in a trust and finance.

[DaleGG]

Reply: 2.1.3.2.1.2
From: Dale Gatherum-Goss


Hi Simon!

At this stage, whilst I like the concepts of the hybrid trust, I have not yet satisfied myself that all the features that I want (eg asset protection) are in place.

So, I'm interested but not yet fully convinced . . .

For the time being Simon, I would stay with your own structure as it is tried and tested although I am hopeful of being able to confidently say something else at a later date.

I'll keep you posted.

Dale

 

[DaleGG]

Reply: 2.1.4.1
From: Dale Gatherum-Goss


Hi

I am sorry, Anonymous, I have a policy of not answering questions from people who do not introduce themselves in some small way.

It would be the same if I was talking to a group of people that I know and a complete stranger walked up and interrupted . . . without even the courtesy of introducing themselves.

Not very polite really.

I respect your privacy, and don't care who you really are, but, a simple nickname or something would be nice.

I know that there are others on this forum who think the same way and you might find people more forthcoming when you develop a relationship or cammaradarie of sorts.

Good luck and in answer to your question . . . I do not know the full extent of exactly how it works yet.

Dale

 

[WebBoard]

Reply: 2.1.4.1.1
From: Gordon Austin


I'm making preliminary inquiries with a solicitor as to whether our existing discretionary trust can be varied to add the clauses that will effectively make it a Hybrid Trust. Initial discussions suggest that because beneficiaries are not being changed there is a strong possibility that a resettlement & restamping of the discretionary trust won't be required. However the same may not apply to the conversion of a unit trust to a Hybrid trust. But ask two solicitors the same question and you may well get two different answers so I will be wanting very strong evidence to support any claims.

I eagerly await Dale's conclusion about all of this as he is very thorough and sensibly conservative which will gives me great confidence in his findings. His concerns about asset protection are very valid and this is one area that appears to be a bit unclear.

I haven't got Chris Batten's full report (but am so curious now that will probably order today) but I do have another free document from him. One common scenario that is mentioned is that when the trust purchases a property and a standard 80% loan is obtained by the trust one could use the issue of units etc for the other 26% approx of external funds required.

For those who are really curious the only real difference I can see between Chris Batten's Discretionary and Hybrid trust relates to two sections toward the end of the document dealing with the Issue and redemption on units.

If I'm convinced that our existing Discretionary trust can be varied to add the few additional sections without requiring resettlement and restamping etc I may be tempted to have them included just for additional flexibility. I may never use them if asset protection is compromised but better to get these things done sooner rather later.

Gordon